Contract
Exhibit
10.1
NOTICE
OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE
ANY OF THE FOLLOWING INFORMATION FROM THE INSTRUMENT BEFORE IT IS FILED FOR
RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S
LICENSE NUMBER.
FINAL
EXECUTION VERSION
Loan
No. 00-0000000
DEED
OF TRUST,
ASSIGNMENT
OF LEASES AND RENTS,
from
COMPANY
SUBSIDIARY
as
Grantor, to
XXXXXX
X. XXXXXXX, ESQ.,
as
Trustee, for the benefit of
CAPMARK
BANK,
as
Beneficiary
Dated:
September 18, 2006
PREPARED
BY AND AFTER RECORDATION RETURN TO:
Xxxxxx
Xxxxxx Xxxxxxxx LLP
0000
Xxxxxx Xxxxxxxxx Xxxxxx, X.X.
Suite
700, East Tower
Washington,
D.C. 20007-5201
Attn:
Xxxx X. Xxxxxxxxxxxx, Esq.
TABLE
OF CONTENTS
Section Page
|
1.
|
Defined
Terms
|
5
|
|
2.
|
The
Loan
|
13
|
|
3.
|
Warranty
of Title
|
14
|
|
4.
|
Insurance
|
14
|
|
5.
|
Payment
of Taxes
|
20
|
|
6.
|
Tax
Escrow Fund
|
21
|
|
7.
|
Annual
Budget; Accounts
|
22
|
|
8.
|
Condemnation
|
22
|
|
9.
|
Leases
and Rents
|
25
|
|
10.
|
Representations
Concerning Loan and Anti-Terrorism Laws
|
28
|
|
11.
|
Single
Purpose Entity; Authorization
|
33
|
|
12.
|
Maintenance
of Property
|
35
|
|
13.
|
Transfer
or Encumbrances of the Property
|
35
|
|
14.
|
Certificates:
Affidavits
|
37
|
|
15.
|
Changes
in the Laws Regarding Taxation
|
37
|
|
16.
|
No
Credits on Account of the Debt
|
38
|
|
17.
|
Documentary
Stamps
|
38
|
|
18.
|
Controlling
Agreement
|
38
|
|
19.
|
Books
and Records
|
39
|
|
20.
|
Performance
of Other Agreements
|
40
|
|
21.
|
Further
Assurances
|
41
|
|
22.
|
Recording
of Mortgage
|
42
|
|
23.
|
Reporting
Requirements
|
43
|
|
24.
|
Events
of Default
|
43
|
|
25.
|
Late
Payment Charge: Servicing Fees
|
46
|
|
26.
|
Right
to Cure Defaults
|
46
|
|
27.
|
Remedies
|
46
|
|
28.
|
Right
of Entry
|
50
|
|
29.
|
Security
Agreement
|
50
|
|
30.
|
Actions
and Proceedings
|
51
|
|
31.
|
Waiver
of Setoff and Counterclaim
|
51
|
|
32.
|
Contest
of Certain Claims
|
51
|
|
33.
|
Recovery
of Sums Required to Be Paid
|
52
|
|
34.
|
Marshaling
and Other Matters
|
52
|
|
35.
|
Hazardous
Substances
|
52
|
|
36.
|
Asbestos
|
53
|
|
37.
|
Environmental
Monitoring
|
54
|
|
38.
|
Management
of the Property
|
54
|
|
39.
|
Handicapped
Access
|
57
|
|
40.
|
ERISA
|
57
|
|
41.
|
Indemnification
|
58
|
|
42.
|
Recourse
and Indemnification
|
59
|
|
43.
|
Notice
|
60
|
|
44.
|
Authority
|
61
|
|
45.
|
Waiver
of Notice
|
62
|
|
46.
|
Remedies
of Mortgagor
|
62
|
|
47.
|
Sole
Discretion of Mortgagee
|
62
|
|
48.
|
Non-Waiver
|
62
|
|
49.
|
No
Oral Change
|
63
|
|
50.
|
Liability
|
63
|
|
51.
|
Inapplicable
Provisions
|
63
|
|
52.
|
Section
Headings
|
63
|
|
53.
|
Counterparts
|
63
|
|
54.
|
Certain
Definitions
|
64
|
|
55.
|
Assignments
|
64
|
|
56.
|
SUBMISSION
TO JURISDICTION
|
64
|
|
57.
|
Agent
for Receipt of Process
|
64
|
|
58.
|
Service
of Process
|
65
|
|
59.
|
WAIVER
OF JURY TRIAL
|
65
|
|
60.
|
Homestead
|
65
|
|
61.
|
CHOICE
OF LAW
|
65
|
|
62.
|
Time
of Essence
|
66
|
|
63.
|
Survival
|
66
|
|
64.
|
No
Third-Party Beneficiary Rights Created
|
66
|
|
65.
|
Discharge
|
66
|
|
66.
|
Maintaining
Priority of Mortgage
|
66
|
|
67.
|
Costs
|
66
|
|
68.
|
Defeasance
|
67
|
|
69.
|
Ground
Lease
|
70
|
|
70.
|
Local
Law Provisions
|
70
|
DEED
OF TRUST,
ASSIGNMENT
OF LEASES AND RENTS,
This
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE
FILING (this
"Deed
of Trust")
is
dated this 18th
day of
September, 2006 from COMPANY
SUBSIDIARY,
a
Tennessee limited partnership, having an address c/o Equity Inns, Inc., 0000
Xxxx Xxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000 (“Grantor”)
to c/o
XXXXXX
X. XXXXXXX,
whose
address is c/x Xxxxxxxxxxx & Xxxxxxxx Xxxxxxxxx Xxxxxx, LLP, 0000 Xxxxx
Xxxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, as Trustee (“Trustee”),
for
the benefit of CAPMARK
BANK,
a Utah
Industrial Bank f/k/a GMAC Commercial Mortgage Bank, a Utah industrial bank
with
an address at 0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxx 00000, Attention:
President (together
with its successors or assigns or any servicers selected by the holder(s) of
the
Note from time to time in its sole discretion to service the Loan, "Beneficiary").
WHEREAS,
Grantor
is indebted to Beneficiary for the amount of the Loan (defined below) and such
Loan is secured by, among other things, a first lien security interest in the
Property (defined below) encumbered by this Deed of Trust.
GRANTOR,
in
consideration of the indebtedness herein recited, and in consideration of the
sum of Ten and No/100 Dollars ($10.00) in hand paid by Beneficiary, the receipt
of which is hereby acknowledged, intending to be legally bound, does hereby
irrevocably mortgage, grant, bargain, sell, pledge, assign, warrant, transfer
and convey unto Trustee for the benefit of Beneficiary and its successors and
assigns forever, in trust, with power of sale, all of Grantor’s right, title and
interest in and to certain land in Brazos County, Texas, more particularly
described in Exhibit
“A”
attached
hereto and made a part hereof (the "Land";
together with all of the following described property, collectively, the
"Property");
TOGETHER
WITH
all
Improvements (as hereinafter defined) now or hereafter situated or to be
situated on the Land or appurtenant thereto;
TOGETHER
WITH
all
machinery, furnishings and equipment including, without limitation, all
furnaces, boilers, oil burners, radiators and piping, coal stokers,
refrigeration and sprinkler systems, wash-tubs, sinks, gas and electric
fixtures, awnings, window shades, kitchen cabinets, plants and shrubbery and
all
other equipment and machinery, motor vehicles and other vehicles, appliances,
fittings and fixtures of every kind in or used in the operation of the Land
and
the Improvements (defined below), together with any and all replacements thereof
and additions thereto, fixtures (including, without limitation, all heating,
air
conditioning, plumbing and bathroom, lighting, communications and elevator
fixtures), inventory, excluding alcoholic beverage inventory, and articles
of
personal property and accessions thereof and renewals, replacements thereof
and
substitutions therefor (including, without limitation, beds, bureaus,
chiffonniers, chests, chairs, desks, lamps, mirrors, bookcases, tables, rugs,
carpeting, drapes, draperies, curtains, shades, venetian blinds, screens,
paintings, hangings, pictures, divans, couches, luggage carts, luggage racks,
stools, sofas, chinaware, linens, pillows, blankets, glassware, foodcarts,
cookware, dry cleaning facilities, dining room wagons, keys or other entry
systems, bars, bar fixtures, liquor dispensers and other drink dispensers,
icemakers, radios, clock radios, television sets, intercom and paging equipment,
electric and electronic equipment, dictating equipment, private telephone
systems, medical equipment, potted plants, heating, lighting and plumbing
fixtures, fire prevention and extinguishing apparatus, cooling and air-
conditioning systems, elevators, escalators, fittings, plants, apparatus,
stoves, ranges, refrigerators, laundry machines, tools, machinery, engines,
dynamos, motors, boilers, incinerators, switchboards, conduits, compressors,
vacuum cleaning systems, floor cleaning, waxing and polishing equipment, call
systems, brackets, electrical signs, bulbs, bells, fuel, conveyors, cabinets,
lockers, shelving, spotlighting equipment, dishwashers, garbage disposals,
washers and dryers), other customary equipment and other property of every
kind
and nature, whether tangible or intangible, whatsoever owned by Grantor, or
in
which Grantor have or shall have an interest, now or hereafter located upon
the
Land and the buildings, structures and improvements now or hereafter erected
or
located thereon or appurtenant thereto, including without limitation that
Hampton Inn hotel on the Land and all related amenities and improvements
(collectively, the "Improvements"),
and
usable in connection with the present or future operation and occupancy of
the
Land and the Improvements and all equipment, materials and supplies of any
nature whatsoever owned by Grantor, or in which Grantor have or shall have
an
interest, now or hereafter located upon the Land and the Improvements, or
appurtenant thereto, or usable in connection with the present or future
operation, enjoyment and occupancy of the Land and the
Improvements(collectively, the "Personal
Property"),
and
all proceeds and products of any such property;
TOGETHER
WITH
all
accounts, escrows (including, without limitation, the Accounts), escrows,
documents, instruments, chattel paper, claims, deposits, deposit accounts,
payment intangibles, investment property and general intangibles, as such terms
are defined in the Uniform Commercial Code, and all agreements, contracts,
certificates, instruments, and other documents, now or hereafter entered into,
including, without limitation, any interest of Grantor in the Management
Agreement and interests, if any, of Grantor in the Franchise Agreement and
all
proceeds, substitutions and replacements thereof, all contract rights, insurance
proceeds, condemnation award or proceeds, security deposits, franchises (to
the
extent assignable), books, records, appraisals, architectural and engineering
plans, specifications, environmental and other reports relating to the Land,
trademarks (to the extent assignable), trade names (to the extent assignable),
servicemarks, logos, copyrights, goodwill, symbols, permits (to the extent
assignable), licenses (to the extent assignable), approvals, actions, tenant
or
guest lists, correspondence with present and prospective purchasers, tenants,
guests and suppliers, advertising materials and telephone exchange numbers
as
identified in such materials, all refunds, rebates or credits in connection
with
a reduction in real estate taxes and assessments charged against the Land as
a
result of tax certiori or any applications or proceedings for reduction, and
causes of action which now or hereafter relate to, are derived from or are
used
in connection with the Land, or the use, operation, maintenance, occupancy
or
enjoyment thereof or the conduct of any business or activities thereon, all
of
the foregoing to the extent owned by Grantor (collectively, "Intangibles");
TOGETHER
WITH
the
Operating Lease (as hereinafter defined), all other leases and other agreements
(including, without limitation, the Franchise Agreement (to the extent
assignable) and the Management Agreement, and food, liquor and other beverage
licenses, including any alcoholic beverage license, if applicable), affecting
the use, enjoyment or occupancy of the Land or the Improvements heretofore
or
hereafter entered into (including, without limitation, subleases, licenses,
concessions, tenancies and other occupancy agreements covering or encumbering
all or any portion of the Land, together with any guarantees, supplements,
amendments, modifications, extensions and renewals of any thereof, and all
additional remainders, reversions, and other rights and estates appurtenant
thereto, as the same may be amended from time to time (the Operating Lease
and
all such leases, subleases, and other such agreements being hereinafter referred
to collectively as the "Leases");
TOGETHER
WITH
all of
Xxxxxxx's right, title and interest in and to any easements and appurtenances
affecting the Property;
TOGETHER
WITH
all of
Xxxxxxx’s right, title and interest in and to the Operating Agreements (as
defined in Section 20 herein), together with any amendments, modifications,
extensions and renewals of any thereof, and all subordinations, estoppels and
other rights in connection therewith;
TOGETHER
WITH
all
agreements, contracts, certificates, instruments, franchises, permits, licenses
(including, without limitation, food, liquor and other beverage licenses, to
the
extent assignable), plans, specifications and other documents, now or hereafter
entered into, together with any amendments, modifications, extensions and
renewals of any thereof, and all subordinating estoppel rights therein and
thereto, respecting or pertaining to the use, occupation, construction,
management or operation of the Land and any part thereof and any Improvements
or
respecting any business or activity conducted on the Land and any part thereof
and all right, title and interest of Grantor therein and thereunder, including,
without limitation, the right, while an Event of Default remains uncured, to
receive and collect any sums payable to Grantor thereunder;
TOGETHER
WITH
the
right, in the name and on behalf of Grantor, to commence any action or
proceeding to protect the interest of Beneficiary in the Property and while
an
Event of Default remains uncured, to appear in and defend any action or
proceeding brought with respect to the Property;
TOGETHER
WITH
all (i)
income, base rents, percentage rents, other rents, security deposits (including
any security deposits, letters of credit or other collateral provided to Grantor
under the Operating Lease), subrents, room rates, receipts, issues, profits,
revenues (including all oil and gas or other mineral royalties or bonuses),
deposits and other benefits now due or which may become due or to which Grantor
is now or hereafter may become entitled or which Grantor may demand or claim
arising or issuing from or out of the Operating Lease, or any Lease, or arising
out of or issuing from the operation of the business at the Land or any part
thereof and all amounts paid as rents for such Land or the fees, charges,
accounts or other payments for the use or occupancy of rooms and other public
facilities in hotels, motels or other lodging facilities, including, without
limitation, all revenues and credit card receipts collected from guest rooms,
restaurants, bars, mini-bars, meeting rooms, banquet rooms, recreational
facilities and otherwise; and (ii) receivables, customer obligations,
installment payment obligations and other payment obligations whether already
accrued, now accruing or to accrue in the future for the occupancy or use of
the
Property or any part thereof,
or arising or created out of the sale, lease, sublease, license, concession
or other
grant of the right of the possession, use or occupancy of all or any portion
of
the Land or personalty located thereon, or the rendering
of services by Grantor or any operator or manager of the hotel or the commercial
space located in the Improvements or acquired from others including, without
limitation, from the rental of
any
office space, retail space, commercial space, parking space, guest rooms or
other space, halls, stores or offices, including any deposits securing
reservations of such space, exhibit or sales space of every kind, license,
lease, sublease and concession fees and rentals, health club membership fees,
food and beverage wholesale and retail sales, service charges, vending machine
sales and proceeds, if any, from business interruption or other loss of income
insurance relating to the use, enjoyment or occupancy of the Land, regardless
of
whether the revenues described in the preceding clauses (i) and (ii) are paid
or
accrued before or after the filing by or against Grantor of any petition for
relief under any state or federal bankruptcy or insolvency laws (collectively,
"Rents");
and
TOGETHER
WITH all
awards heretofore and hereafter made to Grantor for taking by eminent domain
the
whole or any part of the Land or any easement therein, including any awards
for
changes of grade of streets; and
TOGETHER
WITH
any and
all rights of Grantor in and to the foregoing.
TO
HAVE AND TO HOLD
the
Property unto Trustee for the benefit of Beneficiary and unto its successors
and
assigns in fee simple forever with all appurtenances hereunto
belonging.
PROVIDED,
HOWEVER,
that
upon full payment of all indebtedness hereby secured, and upon performance
of
all covenants, obligations and indemnities hereby secured, the Property shall
be
re-conveyed and released from the lien of this Deed of Trust.
TO
SECURE
to
Beneficiary:
(a) Payment
of all indebtedness evidenced by an interest-bearing loan and debt in the
maximum principal sum not to exceed $__________________________________________
(the "Loan"),
evidenced by that certain Deed of Trust Note, dated as of the date hereof from
Grantor, as maker, to Beneficiary, as payee (the "Note"),
the
terms of which are incorporated herein by reference as well as all renewals,
extensions, modifications and recastings of the Note.
(b) The
performance of all covenants, obligations, indemnities and agreements required
of Grantor or of any other person or entity liable under the Note, this Deed
of
Trust, any indemnity executed in connection with the Loan, and all other
agreements, documents, and instruments evidencing, securing or otherwise
relating to the indebtedness hereby secured (the Note, this Deed of Trust,
the
Lease Assignment, the Assignment of Lease Assignment, the Contract Assignment,
the Assignment of Contract Assignment, the Financing Statement, the
Environmental Agreement, the Guaranty, the Manager’s Consent, the Replacement
Reserve Agreement, the Repair Escrow Agreement, the ENN Subordination, and
all
such other agreements, documents and instruments are hereinafter referred to
collectively as the "Loan
Documents").
(c) The
payment of (i) interest, default interest, late charges and other sums as
provided in the Loan Documents; and (ii) all other monies agreed or provided
to
be paid by Grantor in the Loan Documents.
(d) The
payment of any and all future advances made to Grantor hereunder or under any
Loan Document.
(e) The
performance of all obligations of Guarantor, or any other surety, guarantor
or
indemnitor of any of the obligations of Grantor under the Loan
Documents.
(f) The
payment of all costs and expenses, including court costs, attorneys' fees,
witness fees (including fees of expert witnesses), paid, advanced, or incurred
by Beneficiary pursuant to the Loan Documents to protect or preserve the
Property or the validity or priority of this Deed of Trust, or to enforce the
remedies of Beneficiary as provided for herein or in the other Loan
Documents.
(g) The
performance by Grantor of all obligations of Grantor as landlord under the
Operating Lease or under any other Lease of all or any portion of the
Property.
1. Defined
Terms
The
following terms shall have the following meanings:
(1) "Access
Laws"
has the
meaning set forth in Section 39(a) hereof.
(2) "Accounts"
has the
meaning set forth in Section 7 hereof.
(3) "Asbestos"
has the
meaning set forth in Section 36 hereof.
(4) "Assignment
of Contract Assignment"
has the
meaning set forth in Section 2(b) hereof.
(5) "Assignment
of Lease Assignment"
has the
meaning set forth in Section 2(b) hereof.
(6) "Beneficiary"
has the
meaning set forth in the preamble to this Deed of Trust, together with all
successors and assigns thereof.
(7) "Budget"
means
the budget for the use and application of the Loan and gross revenues derived
from the operation of the Property, including all expenses to be satisfied
from
the Accounts, as set forth in the budget delivered by Grantor to Beneficiary
on
the date hereof with respect to the balance of the current calendar year, and
the annual budget to be delivered in accordance with the terms hereof for each
subsequent calendar year for so long as any portion of the Debt remains
outstanding.
(8) "Closing
Date"
shall
mean the date hereof.
(9) "Collateral"
has the
meaning set forth in Section 29 hereof.
(10) "Condemnation"
has the
meaning set forth in Section 8(a) hereof.
(11) "Contract
Assignment"
has the
meaning set forth in Section 2(b) hereof.
(12) "Debt"
means
the outstanding principal balance of the Note from time to time, with all
accrued and unpaid interest thereon, and all other sums now or hereafter due
under the Loan Documents, as well as the definition located in the last
paragraph of this Section.
(13) "Debt
Service Coverage Ratio"
shall
mean the ratio of:
(i) the
NOI
produced by the operation of the Property during the twelve (12)
calendar month period immediately preceding the calculation, to
(ii)the
projected payments of principal and interest due under the Note for
the
twelve (12) calendar month period immediately following the
calculation, as said coverage ratio is reasonably calculated by Beneficiary
in accordance with its then-applicable underwriting standards.
(14) "Deed
of Trust"
has the
meaning set forth in the recitals of this Deed of Trust.
(15) "Default
Rate"
means
the rate of interest payable from and after the occurrence of an Event of
Default (hereinafter defined), as more particularly described in the Note;
provided,
however,
that
with respect to an Event of Default of the type described in Section 24(a)
hereof, such rate of interest shall apply from and after the date on which
any
such payment is due, without any period of grace or cure.
(16) "ENN"
shall
mean ENN College Station, L.L.C., a Delaware limited liability
company.
(17) "ENN
Subordination"
has the
meaning set forth in Section 2(b).
(18) "Environmental
Agreement"
has the
meaning set forth in Section 2(b) hereof.
(19) “Environmental
Laws”
has
the
meaning set forth in Section 35 hereof.
(20) "Equipment"
means
all machinery, furnishings, equipment, fixtures (including, without limitation,
all heating, air conditioning, plumbing, lighting, communications and elevator
fixtures), inventory and articles of personal property and accessions thereof
and renewals, replacements thereof and substitutions therefor (including,
without limitation, beds, bureaus, chiffonniers, chests, chairs, desks, lamps,
mirrors, bookcases, tables, rugs, carpeting, drapes, draperies, curtains,
shades, venetian blinds, screens, paintings, hangings, pictures, divans,
couches, luggage carts, luggage racks, stools, sofas, chinaware, linens,
pillows, blankets, glassware, foodcarts, cookware, dry cleaning facilities,
dining room wagons, keys or other entry systems, bars, bar fixtures, liquor
and
other drink dispensers, icemakers, radios, clock radios, television sets,
intercom and paging equipment, electric and electronic equipment, dictating
equipment, private telephone systems, medical equipment, potted plants, heating,
lighting and plumbing fixtures, fire prevention and extinguishing apparatus,
cooling and air-conditioning systems, elevators, escalators, fittings, plants,
apparatus, stoves, ranges, refrigerators, laundry machines, tools, machinery,
engines, dynamos, motors, boilers, incinerators, switchboards, conduits,
compressors, vacuum cleaning systems, floor cleaning, waxing and polishing
equipment, call systems, brackets, electrical signs, bulbs, bells, fuel,
conveyors, cabinets, lockers, shelving, spotlighting equipment, dishwashers,
garbage disposals, washers and dryers), other customary hotel equipment and
other property of every kind and nature, whether tangible or intangible,
whatsoever owned by Grantor, or in which Grantor has or shall have an interest,
now or hereafter located upon the Land and the Improvements, or appurtenant
thereto, and usable in connection with the present or future operation and
occupancy of the Land and the Improvements and all building equipment, materials
and supplies of any nature whatsoever owned by Grantor, or in which Grantor
has
or shall have an interest, now or hereafter located upon the Land and the
Improvements, or appurtenant thereto, or usable in connection with the present
or future operation, enjoyment and occupancy of the Land and the
Improvements.
(21) "ERISA"
has the
meaning set forth in Section 40(a) hereof.
(22) "Event
of Default"
has the
meaning set forth in Section 24 hereof.
(23) "Expenses"
means
the aggregate of the following items actually incurred by Grantor or Tenant,
whether or not paid, during the twelve (12) month period ending one (1) month
prior to the date on which the NOI is to be calculated (except that capital
expenses and reserves set forth in subsection (vii) below shall be adjusted
by
Beneficiary to reflect projected adjustments for the subsequent twelve (12)
month period beginning on the date on which the NOI is to be
calculated):
(i) Taxes
and
Other Charges (to the extent such are paid by Grantor from sources other than
the Tax and Insurance Escrow Account);
(ii) sales,
use and personal property taxes;
(iii) management
fees in an amount acceptable to Lender pursuant to the Loan Documents derived
from the operation of the Property and disbursements;
(iv) wages,
salaries, pension costs and all fringe and other employee-related benefits
and
expenses;
(v) franchise
fees and other fees due under the Franchise Agreement;
(vi) Insurance
Premiums (to the extent such are paid by Grantor from sources other than the
Tax
and Insurance Escrow Account);
(vii) the
cost
of utilities, and all other administrative, management, ownership, operating,
leasing and maintenance expenses incurred in connection with the operation
of
the Property;
(viii) the
cost
of necessary repair or replacement of existing improvements on the Property
with
repairs or replacements of like kind and quality or such kind or quality that
is
necessary to maintain the Property to the standards as are required under the
Franchise Agreement, the Operating Lease, or as determined by Beneficiary,
this
Deed of Trust or any of the Loan Documents (to the extent such are paid for
by
Grantor from sources other than the Repair Escrow Account or the Replacement
Reserve Account);
(ix) the
cost
of replacement of Equipment with Equipment of like kind and quality or of such
kind or quality that is necessary to maintain the Property to the standards
that
are required under the Franchise Agreement, the Operating Lease, this Deed
of
Trust or any of the Loan Documents (to the extent such are paid for by Grantor
from sources other than the Replacement Reserve Account);
(x) the
cost
of any other maintenance materials, HVAC repairs, parts and supplies, and
equipment (to the extent such are paid for by Grantor from sources other than
the Replacement Reserve Account);
(xi) monthly
installments (exclusive of the initial deposit made by Grantor on the date
hereof) to the Tax and Insurance Escrow Account, the Repair Escrow Account
and
the Replacement Reserve Account; and
(xii) rental
payments pursuant to any lease.
(24) "FF&E
Financing"
shall
have the meaning set forth in Section 9(g) hereof.
(25) "Financing
Statement"
means
any and all UCC financing statements filed by or on behalf of Beneficiary as
additional security hereunder.
(26) "Franchise
Agreement"
means
the Franchise Agreement, dated January 1, 2001, between ENN (as successor in
interest by assignment from ENN Leasing Company I, L.L.C.) and Franchisor
pursuant to which ENN has the right to operate the hotel located on the Property
under a name and/or hotel system controlled by Franchisor, or any Substitute
Franchise Agreement.
(27)
"Franchisor"
means
Promus Hotels, Inc., a Delaware corporation, or any Replacement Franchisor
approved in accordance with the terms and conditions of this Deed of
Trust.
(28) “General
Partner”
means
EQI College Station Corporation, a Tennessee corporation.
(29) "Grantor"
has the
meaning set forth in the preamble to this Deed of Trust.
(30) "Guarantor"
means
Equity Inns, Inc., a Tennessee corporation.
(31) "Guaranty"
has the
meaning set forth in Section 2(b) hereof.
(32) "Governmental
Authority"
means
any nation or government, any state or other political subdivision thereof,
and
any Person exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to such government.
(33) "Hazardous
Substances"
has the
meaning set forth in Section 35 hereof.
(34) "Improvements"
has the
meaning set forth in the recitals of this Deed of Trust.
(35) "Insurance
Fund"
has the
meaning set forth in Section 4(h) hereof.
(36) "Insurance
Premiums"
has the
meaning set forth in Section 4(d) hereof.
(37) "Insured
Casualty"
has the
meaning set forth in Section 4(e)(ii) hereof.
(38) "Intangibles"
has the
meaning set forth in the recitals of this Deed of Trust.
(39) "Investor"
shall
have the meaning set forth in Section 21(b) hereof.
(40) "Land'"
means
the real property comprising the Property, more particularly described on
Exhibit
"A"
to this
Deed of Trust.
(41) "Lease
Assignment"
has the
meaning set forth in Section 2(b) hereof.
(42) "Leases"
has the
meaning set forth in the recitals of this Deed of Trust.
(43) "Loan"
has the
meaning set forth in the recitals of this Deed of Trust.
(44) "Loan
Documents"
has the
meaning set forth in the recitals of this Deed of Trust.
(45) "Loan-To-Value
Ratio"
means
the ratio of: (i) the Debt, plus all other debt (or other liquidated economic
obligations) which is then outstanding and secured by the Property, to (ii)
the
appraised value of the Property as estimated by an appraiser acceptable to
Beneficiary. Any appraisal for purposes of calculating the Loan-to-Value Ratio
shall be performed in accordance with the then-approved standards under the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended.
(46) "Management
Agreement"
means
that certain Master Management Agreement, dated as of January 1, 2001, as
amended, ENN (as successor in interest by assignment from ENN Leasing Company
I,
L.L.C.) and Manager, pursuant to which Manager operates the Property as a
hotel.
(47) “Manager”
means
Crossroads Hospitality Company, L.L.C., a Delaware limited liability
company.
(48) “Manager’s
Consent”
has
the
meaning set forth in Section 2(b) hereof.
(49) "Maturity
Date"
means
the Maturity Date (as such term is defined in the Note) or any earlier
acceleration of sums due under the Note pursuant to Beneficiary's declaration
of
an Event of Default.
(50) "NOI"
means
as of any date of determination, the aggregate amount of the gross income
derived from the operation of the Property for a particular twelve (12)
consecutive month period prior to each respective date of determination less
the
aggregate amount of Expenses for such twelve (12) consecutive month period,
adjusted in accordance with Beneficiary's then current underwriting requirements
consistent with the underwriting requirements of the applicable national rating
agencies. NOI shall include only Rents and such other income, including any
rent
loss, business interruption or business income insurance proceeds, vending
or
concession income, late fees, forfeited security deposits and other
miscellaneous tenant charges, which are actually received by Grantor or Tenant
and Expenses actually incurred or payable during the period for which the NOI
is
being calculated, as set forth on operating statements satisfactory to
Beneficiary. NOI shall be calculated on an accrual basis in accordance with
generally accepted accounting principles consistently applied, based on the
Uniform System of Accounts.
(51) "Note"
has the
meaning set forth in the recitals of this Deed of Trust.
(52) "O&M
Plan"
shall
have the meaning set forth in Section 36 hereof.
(53) "OFAC
List"
means
the list of specially designated nationals and blocked persons subject to
financial sanctions that is maintained by the U.S. Treasury Department, Office
of Foreign Assets Control and
any
other similar list maintained by the U.S. Treasury Department, Office
of
Foreign Assets Control
pursuant
to any Requirements of Law, including, without limitation, trade embargo,
economic sanctions, or other prohibitions imposed by an Executive Order of
the
President of the United States. The
OFAC
List currently is accessible through the internet website .
(54) "Operating
Lease"
shall
mean that certain Lease Agreement dated as of the date hereof, by and between
Grantor and ENN as may be amended or supplemented from time to time subject
to
this Deed of Trust.
(55) "Operating
Lease Estoppel"
shall
mean that Estoppel Certificate dated as of even date herewith by Tenant for
the
benefit of Beneficiary.
(56) "Other
Charges"
has the
meaning set forth in Section 5 hereof.
(57) "Person"
means
an individual, partnership, limited partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental authority or other entity of whatever
nature.
(58) “Phase
I”
has
the
meaning set forth in Section 35 hereof.
(59) "Policies"
has the
meaning set forth in Section 4(d) hereof.
(60) "Property"
has the
meaning set forth in the recitals of this Deed of Trust.
(61) “Remedial
Work”
has
the
meaning set forth in Section 37 hereof.
(62) "Rents"
has the
meaning set forth in the recitals of this Deed of Trust.
(63) “Repair
Escrow Account”
shall
have the meaning set forth in Section 7(a).
(64) “Repair
Escrow Agreement”
shall
have the meaning set forth in Section 2(b).
(65) "Replacement
Franchisor"
shall
mean a franchisor of comparable quality and brand standards to the Franchisor
as
of the date hereof and acceptable to Lender and in its sole discretion. For
purposes hereof, acceptable Franchisors shall include but shall not be limited
to the following brands or acceptable affiliates thereof: (i) “Marriott” (ii)
“Hilton” (iii) “Starwood” (iv) “Hyatt” or (v) “Intercontinental”.
(66) “Replacement
Reserve Account"
has the
meaning set forth in Section 7(a) hereof.
(67) "Replacement
Reserve Agreement"
has the
meaning set forth in Section 2(b) hereof.
(68) "Requirements
of Law"
means
(a) the organizational documents of an entity, and (b) any law, regulation,
ordinance, code, decree, treaty, ruling or determination of an arbitrator,
court
or other Governmental Authority, or any Executive Order issued by the President
of the United States, in each case applicable to or binding upon such Person
or
to which such Person, any of its property or the conduct of its business is
subject including, without limitation, laws, ordinances and regulations
pertaining to the zoning, occupancy and subdivision of real
property.
(69) "Securities"
has the
meaning set forth in Section 21(b) hereof.
(70) “Substitute
Franchise Agreement”
means
a
replacement franchise agreement with a Replacement Franchisor at any time during
the term of the Loan on terms and conditions as Beneficiary may reasonably
require, including but not limited to Beneficiary’s receipt of (i) a reasonably
acceptable "comfort letter" from such Replacement Franchisor (ii) evidence
that
the aggregate amount of fees payable to the Replacement Franchisor under the
Substitute Franchise Agreement does not exceed the fees payable to the
Franchisor under the existing Franchise Agreement; (iii) rating agency
confirmation that the Substitute Franchise Agreement will not result in a
downgrade, qualification or withdrawal of the then current ratings of the
securities; (iv) evidence that the Substitute Franchise Agreement reflects
an
arms'-length transaction, (v) evidence that Grantor’s payment of any liquidated
termination fee payable to Franchisor due to termination of the Franchise
Agreement, (vi) Grantor escrows with Beneficiary any and all amounts required
under any Property Improvement Plan required by Replacement Franchisor, if
applicable, (vii) Lender shall have received and reviewed any applicable
Property Improvement Plan at least thirty (30) days prior to the surrender,
termination or cancellation of the Franchise Agreement, if applicable, and
(viii) the Substitute Franchise Agreement shall have a term of not less than
ten
(10) years from the date of the substitution.
(71) "Tax
and Insurance Escrow Account"
has the
meaning set forth in Section 7(b) hereof.
(72) "Tax
and Insurance Escrow Fund"
has the
meaning set forth in Section 6 hereof.
(73) "Taxes"
has the
meaning set forth in Section 5 hereof.
(74) "Tenant"
means
ENN, as tenant under the Operating Lease, and its permitted successors and
assigns.
(75) "Toxic
Mold"
means
any toxic mold or fungus in, on or affecting the Property of a type which may
pose a risk to human health or the environment or could negatively impact the
value of the Property.
(76) "Uniform
Commercial Code"
means
the Uniform Commercial Code, as adopted and enacted by the State or States
where
any of the Property is located.
(77) “Uniform
System of Accounts”
has
the
meaning set forth in Section 10(h) hereof.
Capitalized
terms not otherwise defined herein shall have the meanings ascribed to them
in
the Note. Unless the context clearly indicates a contrary intent or unless
otherwise specifically provided herein, words used in this Deed of Trust may
be
used interchangeably in singular or plural form and the word "Grantor"
shall
mean "each Grantor or any part thereof or any interest therein", the word
"Beneficiary"
shall
mean "Beneficiary, its successors and assigns, and any subsequent holder of
the
Note", the word "Debt"
shall
mean "the Note and any other evidence of indebtedness secured by this Deed
of
Trust", and the word "Property"
shall
include any portion of the Property and any interest therein and the words
"attorneys'
fees"
shall
include any and all attorneys' fees, paralegal and law clerk fees including,
without limitation, fees at the pretrial, trial and appellate levels incurred
or
paid by Beneficiary in protecting its interest in the Property and Collateral
and enforcing its rights hereunder. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice versa.
2. The
Loan
(a) Upon
and
subject to the terms and conditions herein set forth, Beneficiary agrees to
lend
to Grantor and Xxxxxxx agrees to borrow from Beneficiary, the maximum principal
sum not to exceed Four Million Three Hundred Eighty-Nine Thousand and No/100
Dollars ($4,389,000.00). Grantor covenants that it will pay the Debt at the
time
and in the manner provided in the Note, this Deed of Trust and the other Loan
Documents. All payments made to Beneficiary in respect of the Debt after payment
of principal and interest due and payable under the Note shall be applied by
Beneficiary in accordance with the terms and conditions of the Note and in
the
following order of priority:
(i) first,
to
fund the Tax and Insurance Escrow Fund, and, if applicable, the Insurance
Fund;
(ii) next,
to
reimburse Beneficiary for any unpaid costs, sums and expenses incurred or
advanced by Beneficiary on Xxxxxxx's behalf or in the enforcement of
Beneficiary's rights hereunder;
(iii) next,
to
fund the Repair Escrow Account
(iv) next,
to
fund the Replacement Reserve Account to the extent required by, and in
accordance with, the terms and conditions set forth in the Replacement Reserve
Agreement; and
(iv) thereafter,
one hundred percent (100%) of the balance, if any, to reduce the outstanding
principal balance of the Loan.
(b) All
the
covenants, conditions and agreements contained in the Note, the Assignment
of
Assignment of Leases, Rents and Profits dated as of the date hereof from Grantor
to Beneficiary (the "Assignment
of Lease Assignment"),
the
Assignment of Leases, Rents and Profits dated as of the date hereof from ENN
to
Grantor (the "Lease
Assignment"),
the
Environmental Indemnity Agreement dated as of the date hereof among Beneficiary,
Grantor and Guarantor (the "Environmental
Agreement"),
the
Guaranty of Recourse Obligations dated as of the date hereof from Guarantor
to
Beneficiary (the "Guaranty"),
the
Assignment of Assignment of Contracts, Licenses, Permits, Agreements, Warranties
and Approvals dated as of the date hereof from Grantor for the benefit of
Beneficiary (the "Assignment
of Contract Assignment"),
the
Assignment of Contracts, Licenses, Permits, Agreements, Warranties and
Approvals, dated as of the date hereof from ENN for the benefit of Grantor
(the
"
Contract Assignment"),
the
Replacement Reserve Agreement dated as of the date hereof from Grantor for
the
benefit of Beneficiary (the "Replacement
Reserve");
the
Consent, Subordination and Recognition Agreement dated as of the date hereof
by
and between Grantor, Manager and Beneficiary (the "Manager’s
Consent"),
the
Subordination Agreement dated as of the date hereof from Grantor and ENN for
the
benefit of Beneficiary (the "Subordination
Agreement"),
the
Repair Escrow Agreement dated as of the date hereof from Grantor for the benefit
of Beneficiary (the "Repair
Escrow Agreement")
and
the other Loan Documents are hereby made a part of this Deed of Trust to the
same extent and with the same force as if fully set forth herein.
3. Warranty
of Title
(a) Grantor
represents and warrants that it has good, indefeasible fee simple title to
the
Property, except for (a) inventory owned by a tenant, and (b) any Equipment
owned by Franchisor under any lease required under the Franchise Agreement,
and
has the full power, authority and right to execute, deliver and perform its
obligations under this Deed of Trust and to acquire, encumber, mortgage, give,
grant, bargain, sell, alienate, enfeoff, convey, confirm, pledge, assign,
hypothecate and grant a security interest in the Property and that Grantor
possesses an unencumbered estate in the Land and the Improvements, and that
it
owns the Property free and clear of all liens, encumbrances and charges
whatsoever except for the Operating Lease and those exceptions approved by
Beneficiary and shown in the title insurance policy insuring the lien of this
Deed of Trust. Grantor further represents and warrants that this Deed of Trust
is and will remain a valid and enforceable first lien on and security interest
in the Property, subject only to such exceptions. Grantor shall forever warrant,
defend and preserve such title and the validity and priority of the lien of
this
Deed of Trust and shall forever warrant and defend such title, validity and
priority to Beneficiary against the claims of all persons
whomsoever.
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4.
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Insurance
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(a) Grantor,
at its sole cost and expense, will keep the Property insured during the entire
term of this Deed of Trust for the mutual benefit of Grantor and Beneficiary
in
accordance with the terms and provisions of this Section 4 against loss or
damage by fire and standard "all risk" perils pursuant to an insurance policy
covering "all risks of physical loss" including, without limitation, riot and
civil commotion, vandalism, malicious mischief, burglary and theft, without
any
exclusion for losses due to windstorm. No such insurance policy shall contain
an
exception or exclusion for terrorism or terrorist acts. Such insurance policy
shall (i) contain an income loss endorsement, (ii) be on a replacement cost
basis with an "agreed amount" endorsement attached or with no co-insurance
and,
(iii) if any of the Improvements or the use of the Property shall at any time
constitute legal non-conforming structures or uses, a law and ordinance
endorsement. Such insurance shall be in an amount equal to the greater of:
(A)
the original principal amount of the Loan (in no event less than the minimum
amount required to compensate for damage or loss on a replacement cost basis),
(B) the then full replacement cost of the Improvements and the Equipment,
without deduction for physical depreciation; and (C) such amount that the
insurer would not deem Grantor or Beneficiary a co-insurer under such policies.
The deductible in respect of such insurance shall not exceed Fifty Thousand
and
No/100 Dollars ($50,000.00). Notwithstanding the foregoing, if at any time
the
Loan is assumed in accordance with the terms and conditions of the Loan
Documents, the deductible in respect of such insurance shall not exceed Ten
Thousand and No/100 Dollars ($10,000.00) unless such assuming borrower shall
request a higher deductible and Beneficiary shall approve such request in
Beneficiary's sole discretion. The premiums for
the
insurance carried in accordance with this Section 4 shall be paid periodically
and in annual installments and each policy shall contain the "Replacement Cost
Endorsement" with a waiver of depreciation. Notwithstanding the foregoing,
Beneficiary shall allow a hazard insurance deductible of One Hundred Thousand
and No/100 Dollars ($100,000.00) per occurrence. In no event may the premiums
for such insurance be financed on behalf of Grantor or any affiliate thereof,
on
a secured or unsecured basis, whether through any “premium lenders”, “premium
finance firms” or the like (“Insurance
Premium Financing”).
(b) Grantor
shall also obtain and maintain during the entire term of this Deed of Trust,
at
its sole cost and expense, for the mutual benefit of Grantor and Beneficiary,
the following policies of insurance:
(i) Flood
insurance if any part of the Property is currently or at any time in the future
located in an area identified by the Federal Emergency Management Agency as
a
Zone "A" and "V", Special Hazard Area; provided,
however,
that if
any part of the Property is currently located in any other types of Special
Hazard Area, Lender may require flood insurance in an amount at least equal
to
the lesser of: (A) the outstanding principal amount of the Note; or
(B) the full replacement cost of the Improvements and the Equipment, having
a deductible of not more than Twenty-Five Thousand and No/100 Dollars
($25,000.00) or five percent (5%) of NOI after the payment of debt service
under
the Loan, whichever is less;
(ii) (A)
Comprehensive public liability insurance, including broad form property damage,
blanket contractual and personal injuries (including death resulting therefrom)
coverages and "Dram shop" or other liquor liability coverage if alcoholic
beverages are sold from or may be consumed at the Property, and containing
minimum limits per occurrence of One Million and No/100 Dollars ($1,000,000.00)
and Two Million and No/100 Dollars ($2,000,000.00) minimum general aggregate
for
the Land and the Improvements, or such greater amount as may be required under
the Franchise Agreement; and (B) Umbrella liability insurance containing minimum
limits of Ten Million and No/100 Dollars ($10,000,000.00) for the Land and
the
Improvements, or such greater amount as may be required under the Franchise
Agreement;
(iii) Rental
loss insurance in an amount equal to the aggregate annual amount of all rents
and additional rents payable by all of the tenants under the Leases (whether
or
not such Leases are terminable in the event of a fire or casualty), such rental
loss insurance to cover rental losses for a period of at least one year after
the date of the fire or casualty in question. The amount of such rental loss
insurance shall be increased from time to time during the term of this Deed
of
Trust as and when new Leases and renewal Leases are entered into in accordance
with the terms of this Deed of Trust, to reflect all increased rent and
increased additional rent payable by all of the tenants under such renewal
Leases and all rent and additional rent payable by all of the tenants under
such
new Leases;
(iv) Business
interruption insurance: (A) with loss payable to Beneficiary, its successors
and/or assigns, as their respective interests may appear; (B) covering all
risks
required to be covered by the insurance provided for in Section 4(b); (C)
containing an extended period of indemnity endorsement which provides that
after
the physical loss to the Improvements and all personal property has been
repaired, the continued loss of income will be insured until the Property is
restored (or if such income is not as of the date of restoration at the same
level it was at prior to the loss, then until two (2) months following the
restoration date), or the expiration of twelve (12) months from the date of
the
loss, whichever first occurs, and notwithstanding that the policy may expire
prior to the end of such period; and (D) in an amount equal to Eight Hundred
Fifty-One Thousand and No/100 Dollars ($851,000.00) based on Expenses and NOI
for the Property. The amount of such business interruption insurance shall
be
determined prior to the date hereof and at least once each year thereafter
based
on this clause 4(b)(iv)(D). All insurance proceeds payable to Beneficiary
pursuant to this Section shall be held by Beneficiary and shall be applied
to
the obligations secured hereunder from time to time due and payable hereunder
and under the Note; provided,
however,
that
nothing herein contained shall be deemed to relieve Grantor of its obligations
to pay the obligations secured hereunder on the respective dates of payment
provided for in the Note except to the extent such amounts are actually and
timely paid out of the proceeds of such business interruption
insurance;
(v) Insurance,
in an amount equal to the insurable value of the Improvements and the Equipment,
against loss or damage from: (A) leakage of sprinkler systems; and (B) explosion
of steam boilers, air conditioning equipment, high pressure piping, machinery
and equipment, pressure vessels or similar apparatus now or hereafter installed
in the Improvements, such coverage must include a joint loss clause unless
the
coverages otherwise required by this Section and in this subsection (v) are
provided by one (1) Policy ;
(vi) Worker's
Compensation or Employer’s Liability insurance with respect to any employees of
Grantor, as required by any governmental authority or legal
requirement;
(vii) Comprehensive
motor vehicle liability coverage for all owned and non-owned vehicles, including
rented and leased vehicles, containing minimum limits per occurrence of One
Million and No/100 Dollars ($1,000,000.00) with the same minimum limits of
liability umbrella coverage as is specified under clause (b)(ii)(B) above,
or
such greater amount as may be required under the Franchise
Agreement;
(viii) Professional
Liability, Blanket crime and fidelity bond insurance coverage insuring against
losses resulting from dishonest or fraudulent acts committed by Xxxxxxx's or
Manager’s personnel;
(ix) Earthquake
insurance (including subsidence), if the Property is located in an earthquake
prone region as determined by Beneficiary, insuring in an amount equal to one
times (1X) the probable maximum loss of the Property (as determined by
Beneficiary) with a maximum deductible of no greater than ten percent (10%)
of
the face amount of the Policy or Twenty-Five Thousand and No/100 Dollars
($25,000.00); provided, however, that if the deductible exceeds five percent
(5%), Beneficiary shall have the right to require Grantor to escrow funds with
Beneficiary in an amount sufficient to fund the amount of the deductible in
excess of five percent (5%);
(x) if
required by Beneficiary, ordinance or law coverage to compensate for the cost
of
demolition and the increased cost of construction;
(xi) Insurance
coverage that provides protection for claims for (1) property damage and
business interruption losses, and (2) bodily injury and property damage
liability (primary and excess liability) arising from a terrorist act. The
minimum coverage required will be that level of coverage provided under TRIEA
(Terrorism Risk Insurance Extension Act of 2005); and
(xii) Such
other insurance as may from time to time be reasonably required by Beneficiary,
including, without limitation, during the course of any construction of, or
repairs to, any Improvements, builder's completed value risk insurance against
"all risks of physical loss" including (A) collapse, water damage and transit
coverage, in a nonreporting form, covering the total value of work performed
or
contracted for and equipment, supplies and materials furnished or contracted
for, plus interest, costs and other "soft" construction costs as Beneficiary
deems appropriate, and (B) a full installation floater to insure all materials
stored on the Land but not yet part of the permanent installation.
The
insurance coverage required under this Section 4(b) may be offered under a
blanket policy or poli-cies covering the Property and other properties and
assets not constituting a part of the security hereunder; provided that any
such
blanket policy shall specify, except in the case of public liability insurance,
the portion of the total cover-age of such policy that is allocated to the
Property, and identify the Property, with a mortgagee clause naming Beneficiary,
its successors and/or assigns specifically for the Property.
(c) Grantor
shall increase the amount of insurance required to be provided hereunder at
the
time that each such policy is renewed (but, in any event not less frequently
than once during each twelve (12) -month period) by using the X.X. Xxxxx
Building Index to determine whether there has been an increase in the
replacement cost of the Improvement since the most recent adjustment of any
such
policy and, if there has been any such increase, the amount of insurance
required to be provided hereunder shall be adjusted accordingly.
(d) All
policies of insurance required pursuant to this Section (collectively, the
"Policies")
shall:
(i) be issued by an insurer fully licensed in the state where the Property
is
located, with
such
insurer having at least an A.M. Best’s general policyholder’s rating of
"A"
with a
financial size category of "X" or
an
investment grade, claims paying ability rating, of "A"
by
Standard & Poor’s Rating Group or
an
equivalent rating from a rating agency of similar stature and quality or issued
by an insurer otherwise acceptable to Beneficiary in its sole discretion (or,
if
not acceptably rated by any of the foregoing, a cut
through endorsement
from an
acceptably rated company will be required, with a reinsurance agreement having
a
total value, one hundred percent (100%) assumption of liability endorsement,
which must include a requirement for at least ninety (90) days notice of
cancellation thereof); (ii) contain a standard "noncontributory mortgagee"
clause or endorsement and a "lender's loss payable endorsement" or their
equivalents and shall name Beneficiary, its successors and/or assigns, as their
respective interests may appear, as an additional insured and loss payee and
as
the person to which all payments made by such insurance company shall be paid;
(iii) contain a waiver of subrogation against Beneficiary; (iv) be maintained
throughout the term of this Deed of Trust without cost to Beneficiary; (v)
be
assigned and delivered (certificates of insurance delivered where blanket
policies are maintained and copies at Beneficiary's reasonable request) to
Beneficiary; (vi) contain such provisions as Beneficiary deems reasonably
necessary or appropriate to protect its interest including, without limitation,
endorsements providing that neither Grantor, Beneficiary nor any other party
shall be a co-insurer thereunder, that Beneficiary shall have no liability
for
insurance premiums thereunder and that Beneficiary shall receive at least
fifteen (15) days prior written notice of any modification, reduction or
cancellation; provided, however, Beneficiary must receive at least ten (10)
days
advance written notice in the event of a cancellation due to non-payment of
any
premium; and (vii) be satisfactory in form and substance to Beneficiary, and
be
approved by Beneficiary as to amounts, form, risk coverage, deductible, loss
payees and insureds. Mortgagor shall have delivered to Beneficiary either an
original of each of the Policies, a copy certified as true, correct and complete
by the insurance agent of such Policies, or other evidence of the existence
of
the Policies satisfactory to Beneficiary in its sole and absolute discretion,
but in no event shall an insurance binder be acceptable evidence of the required
coverage. Unless such premiums are deposited in the Tax and Insurance Escrow
Account, Grantor shall pay or cause Manager to pay the premiums for the Policies
(the "Insurance
Premiums")
as
they become due and payable. Not later than thirty (30) days prior to the
expiration date of each of the Policies, Grantor will deliver to Beneficiary
satisfactory evidence of the renewal of each Policy. Notwithstanding anything
to
the contrary herein, in the event that the Franchise Agreement requires (1)
greater amounts of coverage for any insurance required hereunder, or (2)
additional types of insurance coverage, then the Franchise Agreement insurance
requirements shall prevail. In the event Grantor fails to provide, maintain,
keep in force, or deliver and furnish to Beneficiary evidence of the Policies,
Beneficiary may, with prior written notice to Grantor, procure such insurance
or
single-interest insurance for such risks covering Beneficiary's interest, and
Grantor will reimburse Beneficiary for all premiums paid by Beneficiary,
together with interest thereon from the date paid at the Default Rate, promptly
upon demand by Beneficiary. Until such payment is made by Grantor, the amount
of
all such premiums, together with interest thereon, shall be secured by this
Deed
of Trust.
(e) If
the
Property shall be damaged or destroyed, in whole or in part, by fire or other
casualty, Grantor shall give prompt written notice thereof to
Beneficiary.
(i) In
the
case of a loss covered by Policies, Beneficiary may: (A) settle and adjust
any
claim with the prior consent of Grantor, not to be unreasonably withheld or
(B)
allow Grantor to agree with the insurance company or companies on the amount
to
be paid upon the loss; provided,
however,
that,
if no Event of Default shall have occurred and be continuing, Grantor may adjust
losses aggregating not in excess of One Hundred Thousand and No/100
Dollars ($100,000.00)
if such adjustment is carried out in a competent and timely manner and provided
in any case that Beneficiary shall be, and is hereby, authorized to collect
and
receipt for any such insurance proceeds. The expenses incurred by Beneficiary
in
the adjustment and collection of insurance proceeds shall become part of the
Debt, shall be secured by
this
Deed of Trust and shall be reimbursed by Grantor to Beneficiary on
demand.
(ii) In
the
event of any insured damage to or destruction of the Property or any part
thereof (an "Insured
Casualty"),
the
proceeds of insurance collected shall, at the option of Beneficiary in its
sole
discretion, be applied to the payment of the Debt or applied to reimburse
Grantor for the cost of restoring, repairing, replacing or rebuilding the
Property or the part thereof subject to the Insured Casualty, in the manner
set
forth below. In no case shall any such application reduce or postpone any
payments otherwise required pursuant to the Note. In the event of any Insured
Casualty where: (A) the proceeds of insurance are sufficient to enable
Grantor to fully restore the Property; (B) the term of, and proceeds derived
from, Grantor's business interruption insurance (or other similar insurance)
shall be sufficient to fully cover the period that the Property is undergoing
restoration; (C) Beneficiary determines that the restoration is reasonably
capable of being completed, and is actually completed, at least nine (9) months
prior to the Maturity Date; (D) the Loan-To-Value Ratio upon completion of
restoration is estimated, by an appraiser reasonably acceptable to Beneficiary,
and at Grantor's expense, to be no greater than 0.65:1.0; (E) the Management
Agreement has not been terminated as a result of the Insured Casualty; (F)
the
restoration can be completed within nine (9) months from the date that the
Insured Casualty occurred, or within such shorter time period as may be required
by the Management Agreement; (G) the restoration is permitted or
required under
the
Management Agreement, and (H) the Debt Service Coverage Ratio upon completion
of
the restoration is reasonably estimated by Beneficiary to be a minimum of
1.40:1.0, then, if no Event of Default shall have occurred and be continuing,
the proceeds of insurance shall be applied to the cost of restoring, repairing,
replacing or rebuilding the Property or the part thereof subject to the Insured
Casualty, as provided for below; and Grantor hereby covenants and agrees
forthwith to commence and diligently to prosecute such restoring, repairing,
replacing or rebuilding. NOI for purposes of this calculation shall be NOI
for
the twelve (12) calendar month period immediately preceding the casualty, unless
the appraiser referenced in clause 4(e)(ii)(D) above estimates that NOI after
the restoration will be more than ten percent (10%) less than NOI for such
twelve (12) calendar month period, in which case the Debt Service Coverage
Ratio
shall be calculated using the appraiser's estimate of NOI.
(iii) In
the
event that proceeds of insurance, if any, shall be made available to Grantor
for
the restoring, repairing, replacing or rebuilding of the Property, Grantor
hereby covenants to restore, repair, replace or rebuild the Property to be
of at
least equal value and of substantially the same character as prior to such
damage or destruction, all to be effected in accordance with applicable law
and
plans and specifications approved in advance by Beneficiary and otherwise in
accordance with the requirements of the Franchise Agreement; provided,
however,
that
Grantor shall pay all costs (and if required by Beneficiary, shall deposit
the
total thereof with Beneficiary in advance) of such restoring, repairing,
replacing or rebuilding in excess of the net proceeds of insurance required
to
be made available pursuant to the terms hereof.
(iv) In
the
event Grantor is entitled to reimbursement out of insurance proceeds held by
Beneficiary, such proceeds shall be disbursed from time to time upon Beneficiary
being furnished with: (A) evidence satisfactory to it of the estimated cost
of
completion of the restoration, repair, replacement and rebuilding; (B) funds,
or, at Beneficiary's option, assurances satisfactory to Beneficiary that such
funds are available, sufficient in addition to the proceeds of insurance to
complete the proposed restoration, repair, replacement and rebuilding; and
(C)
such architect's certificates, waivers of lien for work previously performed
or
contemporaneously funded, contractor's sworn statements, title insurance
endorsements, bonds, plats of survey and such other evidences of cost, payment
and performance as Beneficiary may reasonably require and approve. Beneficiary
may, in any event, require that all plans and specifications for such
restoration, repair, replacement and rebuilding be submitted to and approved
by
Beneficiary prior to commencement of work (which approval shall not be
unreasonably withheld). No payment made prior to the final completion of the
restoration, repair, replacement and rebuilding shall exceed ninety percent
(90%) of the value of the work performed from time to time. Funds other than
proceeds of insurance shall be disbursed prior to disbursement of such proceeds,
and at all times the undisbursed balance of such proceeds remaining in
Beneficiary's possession, together with funds deposited for that purpose or
irrevocably committed to the satisfaction of Beneficiary by or on behalf of
Grantor for that purpose, shall be at least sufficient in the judgment of
Beneficiary to pay for the cost of completion of the restoration, repair,
replacement or rebuilding, free and clear of all liens and claims of lien.
Any
surplus which may remain out of insurance proceeds held by Beneficiary after
payment of such costs of restoration, repair, replacement or rebuilding shall
be
delivered to Grantor, provided such restoration was performed in accordance
with
the provisions of this Section and Grantor is not then in default of its
obligations under the Loan Documents. If the conditions in the immediately
preceding sentence have not been satisfied, Beneficiary shall apply such surplus
proceeds to the payment of the Debt in any order in its sole
discretion
(f) Grantor
shall not carry separate insurance, concurrent in kind or form or contributing
in the event of loss, with any insurance required under this Section.
Notwithstanding the foregoing, Grantor may carry insurance not required under
this Deed of Trust, provided any such insurance affecting the Property shall
be
for the mutual benefit of Grantor and Beneficiary, as their respective interests
may appear, and shall be subject to all other provisions of this
Section.
(g) Prior
to
or contemporaneous with the execution of this Deed of Trust, Grantor shall
provide Beneficiary with evidence that the insurance required hereunder is
in
full force and effect in accordance with the terms hereof, with all premiums
due
thereunder prepaid through the maturity of the Note.
5. Payment
of Taxes
Grantor
shall pay all taxes, assessments, water rates and sewer rents, now or hereafter
levied, assessed or imposed against the Property or any part thereof
(collectively, the "Taxes")
and
all ground rents, maintenance charges, other governmental impositions, and
other
charges including, without limitation, vault charges and license fees for the
use of vaults, chutes and similar areas adjoining the Land, now or hereafter
levied, assessed or imposed against the Property or any part thereof
(collectively, the "Other
Charges")
as
they become due and payable. Grantor will deliver to Beneficiary evidence
satisfactory to Beneficiary that the Taxes and Other Charges have been so paid,
or are not then delinquent, no later than thirty (30) days following the date
on
which the Taxes and/or Other Charges would otherwise be delinquent if not paid.
Grantor shall not suffer, and shall promptly cause to be paid and discharged,
any lien or charge whatsoever which may be or become a lien or charge against
the Property, and shall promptly pay for all utility services provided to the
Property. Grantor shall furnish to Beneficiary or its designee receipts for
the
payment of the Taxes, Other Charges and charges for utility services prior
to
the date that such obligations shall become delinquent. Grantor shall be
entitled to contest by appropriate legal proceeding, promptly initiated and
conducted in good faith and with due diligence, the amount of any Taxes or
Other
Charges. Notwithstanding the preceding sentence, during the pendency of any
such
contest Grantor shall pay or cause to be paid all Taxes and Other Charges as
and
when due and payable, or otherwise in accordance with Section 32
hereof.
6. Tax
and Insurance Escrow Fund
Grantor
shall pay to Beneficiary on the Closing Date an initial deposit to the Tax
and
Insurance Escrow Fund in an amount which, when added to the monthly amounts
to
be deposited as specified below, will be sufficient in Beneficiary's estimation,
to satisfy the next due Taxes and Other Charges and the next due Insurance
Premiums. Grantor shall thereafter pay to Beneficiary monthly on the first
(1st)
day of each calendar month: (a) one-twelfth (1/12th) of an amount which
would be sufficient to pay the Taxes and Other Charges payable, or estimated
by
Beneficiary to be payable, during the next ensuing twelve (12) months; and
(b) one-twelfth (1/12th) of an amount which would be sufficient to pay the
Insurance Premiums due for the renewal of the coverage afforded by the Policies
upon the expiration thereof (the amounts described in clauses (a) and (b) of
Section 4 above, collectively, the "Tax
and Insurance Escrow Fund").
The
Tax and Insurance Escrow Fund and the monthly installments of principal and
interest payable under the Note shall be added together and shall be paid as
an
aggregate sum by Grantor to Beneficiary. Grantor hereby pledges to Beneficiary
any and all monies now or hereafter deposited in the Tax and Insurance Escrow
Fund as additional security for the payment of the Debt. Beneficiary will apply
the Tax and Insurance Escrow Fund to payments of Taxes and Insurance Premiums
required to be made by Grantor pursuant to Sections 4 and 5 hereof. If the
amount of the Tax and Insurance Escrow Fund shall exceed the amounts due for
Taxes and Insurance Premiums pursuant to Sections 4 and 5 hereof, Beneficiary
shall, in its discretion, return any excess to Grantor or credit such excess
against future payments to be made to the Tax and Insurance Escrow Fund. If
the
Tax and Insurance Escrow Fund is not sufficient to pay the items set forth
in
Sections 4 and 5 above, Grantor shall promptly pay to Beneficiary, upon demand,
an amount which Beneficiary shall estimate as sufficient to make up the
deficiency. Upon the occurrence of an Event of Default, Beneficiary may apply
any sums then comprising the Tax and Insurance Escrow Fund to the payment of
the
Debt in any order in its sole discretion. Until expended or applied as above
provided, any amounts in the Tax and Insurance Escrow Fund shall constitute
additional security for the Debt. To the extent permitted by applicable law,
the
Tax and Insurance Escrow Fund shall not constitute a trust fund and may be
commingled with other monies held by Beneficiary. No earnings or interest on
the
Tax and Insurance Escrow Fund shall be payable to Grantor.
Notwithstanding
anything in this Deed of Trust to the contrary, for so long as Grantor shall
maintain an escrow fund or funds pursuant to which all Insurance Premiums,
Taxes
and Other Charges are being timely paid, the provisions of this Section 6 shall
not apply; provided,
however,
the
foregoing waiver shall apply solely to Grantor. Upon a transfer or sale of
the
Property in accordance with Section 13 hereof, such transferee or purchaser
of
the Property shall be required to establish and maintain the Tax and Insurance
Escrow Fund in accordance with the terms and conditions of this Section
6.
7. Annual
Budget; Accounts
(a) Beneficiary
shall this day, or as soon hereafter as is practicable, establish and shall
thereafter maintain the following escrow accounts at one or more federally
insured institutions selected by Beneficiary (collectively, the "Accounts"),
each
of which shall be in Beneficiary's name and shall constitute additional security
for the Loan:
(i) If
required pursuant to the Replacement Reserve Agreement, the Replacement Reserve
Account, into which deposits shall be made and from which disbursements shall
be
made in accordance with the Replacement Reserve Agreement (the “Replacement
Reserve Account”);
(ii) Repair
Escrow Account, a non-interest bearing account, into which shall be deposited
certain sums as set forth in the Repair Escrow Agreement for certain
improvements at the Property, from which Grantor may request withdrawals
from
time to time no more frequently than once in any calendar month to complete
certain specified repairs and/or renovations, all as more particularly set
forth
in the Repair Escrow Agreement (the "Repair
Escrow Account");
and
(iii) Subject
to the final paragraph of Section 6, Tax and Insurance Escrow Account, into
which shall be deposited at closing and thereafter monthly on the first (1st)
day of each calendar month, pursuant to the budget, an amount sufficient to
satisfy Grantor's obligations under Section 6 hereof (the "Tax
and Insurance Escrow Account").
(c) Beneficiary
shall have sole signatory authority with respect to any and all withdrawals
from
the Accounts. All such withdrawals shall be made solely in accordance with
the
budget and the applicable Loan Documents, and by this instrument Grantor does
hereby irrevocably authorize and direct Beneficiary to make all such withdrawals
on Grantor's behalf to satisfy Grantor's obligations hereunder and under such
Loan Documents.
(d) If
applicable, the Replacement Reserve Account shall be an interest-bearing account
and the Tax and Insurance Escrow Account shall not bear interest.
8. Condemnation
(a)
Grantor
shall promptly give Beneficiary written notice of the actual or threatened
commencement of any condemnation or eminent domain proceeding (a "Condemnation")
and
shall deliver to Beneficiary copies of any and all papers served in connection
with such proceedings. Beneficiary is hereby irrevocably appointed as Grantor's
attorney-in-fact, coupled with an interest, with exclusive power to collect,
receive and retain any award or payment for such Condemnation and to make any
compromise or settlement in connection with such proceeding, subject to the
provisions of this Deed of Trust. Notwithstanding any taking by any public
or
quasi-public authority through eminent domain or otherwise (including, without
limitation, any transfer made in lieu of or in anticipation of the exercise
of
such taking), Grantor shall continue to pay the Debt at the time and in the
manner provided for in the Note, this Deed of Trust and the other Loan
Documents, and the Debt shall not be reduced until any award or payment therefor
shall have been actually received after expenses of collection and applied
by
Beneficiary to the discharge of the Debt. Beneficiary shall not be limited
to
the interest paid on the award by the condemning authority but shall be entitled
to receive out of the award interest at the rate or rates provided in the
Note.
(b) If
the
Property shall be the subject of a Condemnation, in whole or in part, Grantor
shall give prompt written notice thereof to Beneficiary.
(i) In
the
case of a Condemnation, provided that no Event of Default has occurred and
is
continuing, Beneficiary may: (A) settle and adjust any claim with the prior
written consent of Grantor, or (B) allow Grantor to agree with the condemning
authority on the amount to be paid upon the Condemnation; provided,
however,
that,
if no Event of Default shall have occurred and be continuing, Grantor may adjust
losses aggregating not in excess of Fifty Thousand and No/100 Dollars
($50,000.00) if such adjustment is carried out in a competent and timely manner,
and provided in any case that Beneficiary shall be, and is hereby, authorized
to
collect and receipt for any such Condemnation award or proceeds. Notwithstanding
the foregoing, if an Event of Default shall have occurred and be continuing,
Beneficiary may settle and adjust any claim without the consent of Grantor.
The
expenses incurred by Beneficiary in the adjustment and collection of
a Condemnation
award or proceeds shall become part of the Debt, shall be secured by this Deed
of Trust and shall be reimbursed by Grantor to Beneficiary on
demand.
(ii) In
the
event of any Condemnation affecting all or any portion of the Property, the
award or proceeds collected upon any Condemnation shall, at the option of
Beneficiary in its sole discretion, be applied to the payment of the Debt or
applied to the cost of restoring, repairing, replacing or rebuilding the
Property or the part thereof subject to the Condemnation in the manner set
forth
below. In no case shall any such application reduce or postpone any payments
otherwise required pursuant to the Note. In the event of any Condemnation where:
(A) the Condemnation proceeds are sufficient to enable Grantor to fully restore
the Property; (B) the term of, and proceeds derived from, Grantor's business
interruption insurance (or other similar insurance) shall be sufficient to
fully
cover the period that the Property is undergoing restoration; (C) Beneficiary
determines that the restoration is reasonably capable of being completed, and
is
actually completed, at least nine (9) months prior to the Maturity Date; (D)
the
Loan-To-Value Ratio upon completion of restoration is estimated, by an appraiser
reasonably acceptable to Beneficiary, and at Grantor's expense, to be no greater
than 0.65:1.0; (E) the Management Agreement has not been terminated as a result
of the Condemnation; (F) the restoration can be completed within nine (9) months
from the date that the Condemnation occurred, or within such shorter time period
as may be required by the Management Agreement; (G) the restoration is permitted
or required under the Management Agreement, and (H) the Debt Service Coverage
Ratio upon completion of the restoration is reasonably estimated by Beneficiary
to be a minimum of 1.40:1.0, then, if no Event of Default shall have occurred
and be continuing, the proceeds of insurance shall be applied to the cost of
restoring, repairing, replacing or rebuilding the Property or the part thereof
subject to the Condemnation, as provided for below; and Grantor hereby covenants
and agrees forthwith to commence and diligently to prosecute such restoring,
repairing, replacing or rebuilding. NOI for purposes of this calculation shall
be NOI for the twelve (12) calendar month period immediately preceding the
casualty, unless the appraiser referenced in clause 8(b)(ii)(D) above estimates
that NOI after the restoration will be more than ten percent (10%) less than
NOI
for such twelve (12) calendar month period, in which case the Debt Service
Coverage Ratio shall be calculated using the appraiser's estimate of
NOI.
(iii) In
the
event that a Condemnation award or proceeds, if any, shall be made available
to
Grantor for the restoring, repairing, replacing or rebuilding of the Property,
Grantor hereby covenants to restore, repair, replace or rebuild the Property
to
be of at least equal value and of substantially the same character as prior
to
such Condemnation, all to be effected in accordance with applicable law and
plans and specifications approved in advance by Beneficiary; provided,
however,
that
Grantor shall pay all costs (and if required by Beneficiary, shall deposit
the
total thereof with Beneficiary in advance) of such restoring, repairing,
replacing or rebuilding in excess of the net award or proceeds made available
pursuant to the terms hereof.
(iv) In
the
event Grantor is entitled to reimbursement out of proceeds held by Beneficiary,
such proceeds shall be disbursed from time to time upon Beneficiary being
furnished with: (A) evidence satisfactory to it of the estimated cost of
completion of the restoration, repair, replacement and rebuilding; (B) funds,
or, at Beneficiary's option, assurances satisfactory to Beneficiary that such
funds are available, sufficient in addition to the Condemnation award or
proceeds to complete the proposed restoration, repair, replacement and
rebuilding; and (C) such architect's certificates, waivers of lien for work
previously performed or contemporaneously funded, contractor's sworn statements,
title insurance endorsements, bonds, plats of survey and such other evidences
of
cost, payment and performance as Beneficiary may require and approve.
Beneficiary may, in any event, require that all plans and specifications for
such restoration, repair, replacement and rebuilding be submitted to and
approved by Beneficiary prior to commencement of work (which approval shall
not
be unreasonably withheld). No payment made prior to the final completion of
the
restoration, repair, replacement and rebuilding shall exceed ninety percent
(90%) of the value of the work performed from time to time. Funds other than
the
Condemnation award or proceeds shall be disbursed prior to disbursement of
such
proceeds, and at all times the undisbursed balance of such proceeds remaining
in
Beneficiary's possession, together with funds deposited for
that
purpose or irrevocably committed to the satisfaction of Beneficiary by or on
behalf of Grantor for that purpose, shall be at least sufficient in the judgment
of Beneficiary to pay for the cost of completion of the restoration, repair,
replacement or rebuilding, free and clear of all liens and claims of lien.
Any
surplus which may remain out of a Condemnation award or proceeds held by
Beneficiary after payment of such costs of restoration, repair, replacement
or
rebuilding shall be delivered to Grantor,
provided such
restoration was performed in accordance with the provisions of this Section,
and
Grantor is not then in default of its obligations under the Loan
Documents.
9. Leases
and Rents
(a) In
connection with the Loan, Grantor has absolutely and unconditionally assigned
to
Beneficiary all of Grantor's right, title and interest in all current and future
Leases and Rents, including, without limitation, the Operating Lease and all
Rents derived therefrom, it being intended by Grantor that such assignment
constitutes a present, absolute assignment and not an assignment for additional
security only. Such assignment to Beneficiary shall not be construed to bind
Beneficiary to the performance of any of the covenants, conditions or provisions
contained in any such Lease or otherwise to impose any obligation upon
Beneficiary. Grantor shall execute and deliver to Beneficiary such additional
instruments, in form and substance reasonably satisfactory to Beneficiary,
as
may hereafter be requested by Beneficiary to further evidence and confirm such
assignment. Nevertheless, subject to the terms of this Section, Beneficiary
has
granted to Grantor a revocable license to operate and manage the Property and
to
collect the Rents. Grantor shall hold the Rents, or a portion thereof sufficient
to discharge
all current sums due on the Debt, in trust for the benefit of Beneficiary for
use in the payment of such sums. Upon the occurrence of an Event of Default,
the
license granted to Grantor shall automatically be revoked, and Beneficiary
shall
immediately be entitled to possession of all Rents, whether or not Beneficiary
enters upon or takes control of the Property. Beneficiary is hereby granted
and
assigned by Grantor the right, at its option, upon revocation of the license
granted herein, to enter upon the Property in person, by agent or by
court-appointed receiver to collect the Rents. Any Rents collected after
revocation of the license may be applied toward payment of the Debt in such
priority and proportions as Beneficiary in its discretion shall deem
appropriate.
(b) Grantor
shall furnish Beneficiary with executed copies of all Leases. All renewals
of
Leases and all proposed Leases shall provide for rental rates comparable to
existing local market rates and shall be arms-length transactions and shall
be
subject to the prior written approval of Beneficiary (which approval shall
not
be unreasonably withheld, conditioned or delayed) for all Leases not including
the Operating Lease. All Leases shall provide that they are subordinate to
this
Deed of Trust and that the lessee agrees to attorn to Beneficiary (provided,
as
to the Operating Lease only, that Beneficiary agrees not to disturb xxxxxx’s
possession). Grantor shall: (A) observe and perform all the obligations imposed
upon the lessor under the Leases and shall not do or permit to be done anything
to impair the value of the Leases as security for the Debt; (B) promptly send
to
Beneficiary copies of all notices of default which Grantor shall send or receive
thereunder; (C) enforce all of the terms, covenants and conditions contained
in
the Leases (other than minor waivers in the ordinary course of business in
all
Leases not including the Operating Lease) on the part of the lessee thereunder
to be observed or performed, short of termination thereof; (D) not collect
any
Rents more than one (1) month in advance; (E) not execute any other assignment
of the lessor's interest in the Leases or Rents; (F) other than de
minimis
non-financial amendments, not alter, modify or change the terms of the Leases
without the prior written consent of Beneficiary, or, except if a lessee is
in
default, cancel or terminate the
Leases or accept a surrender thereof or convey or transfer or suffer or permit
a
conveyance or transfer of the Property or of any interest therein so as to
effect a merger of the estates and rights of, or a termination or diminution
of
the obligations
of, lessees thereunder;
provided,
however,
that
any Lease (not including the Operating Lease) may be canceled if at the time
of
the cancellation thereof a new Lease is entered into with a bona fide,
independent third-party on substantially the same terms or more favorable terms
as the canceled Lease; (G) not alter, modify or change the terms of any guaranty
of the Leases or cancel or terminate such guaranty without the prior written
consent of Beneficiary (which approval shall not be unreasonably withheld,
conditioned or delayed for all such guaranties); (H) not consent to any
assignment of or subletting under the Leases (not including the Operating Lease)
not in accordance with their terms, without the prior written consent of
Beneficiary (which consent shall not be unreasonably withheld, conditioned
or
delayed for all such Leases not including the Operating Lease); and (I) execute
and deliver at the request of Beneficiary all such further assurances,
confirmations and assignments in connection with the Property as Beneficiary
shall from time to time request.
(c) All
security deposits of lessees, whether held in cash or any other form, shall
not
be commingled with any other funds of Grantor and, if cash, shall be deposited
by Grantor into a separate "Security Deposits Account." Any bond or other
instrument which Grantor is permitted to hold in lieu of cash security deposits
under any applicable legal requirements shall be maintained in full force and
effect unless replaced by cash deposits as hereinabove described, shall be
issued by an institution satisfactory to Beneficiary, shall, if permitted
pursuant to any legal requirements, name Beneficiary as payee or mortgagee
thereunder (or at Beneficiary's option, be fully assignable to Beneficiary)
and
shall, in all respects, comply with any applicable legal requirements and
otherwise be reasonably satisfactory to Beneficiary. Grantor shall, upon
request, provide Beneficiary with evidence reasonably satisfactory to
Beneficiary of Grantor's compliance with the foregoing. Following the occurrence
and during the continuance of any Event of Default, Grantor shall, upon
Beneficiary's request, if permitted by any applicable legal requirements, turn
over to Beneficiary the security deposits (and any interest theretofore earned
thereon) with respect to all or any portion of the Property, to be held by
Beneficiary subject to the terms of the Leases.
(d) Xxxxxxxxx
makes the following additional covenants with respect to the Operating
Lease:
(i) Grantor
shall (x) diligently perform and observe all of the terms, covenants and
conditions of the Operating Lease on the part of Grantor, as landlord
thereunder, to be performed and observed prior to the expiration of any
applicable grace period therein provided, (y) promptly notify Beneficiary of
the
giving of any notice by Xxxxxx, as tenant thereunder, of any default by Grantor
in the performance or observance of any of the terms, covenants or conditions
of
the Operating Lease on the part of Grantor, as landlord thereunder, to be
performed or observed and deliver to Beneficiary a true copy of each such notice
and (z) diligently enforce all of the terms, covenants and conditions contained
in the Operating Lease which are to be performed by Tenant thereunder. Grantor
shall not, without the prior consent of Beneficiary, in its sole discretion
(regarding rent, other economic terms and other material Operating Lease
provisions, otherwise in its reasonable discretion), surrender the leasehold
estate created by the Operating Lease, consent to an assignment of Tenant's
interest under the Operating Lease, or terminate or cancel the Operating Lease
or modify, change, supplement, alter or amend the Operating Lease, in any
respect, either orally or in writing, and Grantor hereby assigns to Beneficiary,
as further security for the payment of the Debt, all of the rights, privileges
and prerogatives of Grantor, as landlord under the Operating Lease, to surrender
the leasehold estate created by the Operating Lease, to consent to an assignment
of Tenant's interest under the Operating Lease, or to terminate, cancel, modify,
change, supplement, alter or amend the Operating Lease in any respect, and
any
such surrender of the leasehold estate created by the Operating Lease,
assignment of Tenant's interests thereunder, or termination, cancellation,
modification, change, supplement, alteration or amendment of the Operating
Lease
in any material respect without the prior consent of Beneficiary shall be void
and of no force and effect. If Grantor shall receive notice from Tenant of
an
event of default in the performance or observance of any term, covenant or
condition of the Operating Lease on the part of Grantor, as landlord thereunder,
to be performed or observed, then, without limiting the generality of the other
provisions of this Deed of Trust, and without waiving or releasing Grantor
from
any of its obligations hereunder, Beneficiary shall have the right, but shall
be
under no obligation, to pay any sums and to perform any act or take any action
as may be appropriate to cause all of the terms, covenants and conditions of
the
Operating Lease on the part of Grantor, as landlord thereunder, to be performed
or observed or to be promptly performed or observed on behalf of Grantor, to
the
end that the rights of Grantor in, to and under the Operating Lease shall be
kept unimpaired and free from default, even though the existence of such event
of default or the nature thereof be questioned or denied by Grantor or by any
party on behalf of Grantor. Beneficiary will, prior to the making of any such
payment, the performance of any such act, or the taking of any such action
in
accordance with the previous sentence, notify Grantor in writing, consult with
Grantor in connection therewith, and afford Grantor a reasonable opportunity
to
address such matter with Tenant, not to exceed ten (10) business days. In any
such event, subject to the rights of tenants, subtenants and other occupants
under the Leases, Beneficiary and any person designated by Beneficiary shall
have, and are hereby granted, the right to enter upon the Property at any time
and from time to time for the purpose of taking any such action. Beneficiary
may
pay and expend such sums of money as Beneficiary reasonably deems necessary
for
any such purpose and upon so doing shall be subrogated to any and all rights
of
the tenant under the Operating Lease. Grantor hereby agrees to pay to
Beneficiary promptly after demand, which demand shall include documentation
describing Beneficiary's expenditures in reasonable detail, all such sums so
paid and expended by Beneficiary, together with interest thereon from the day
of
such payment until paid at the Default Rate (as defined in the Note). All sums
so paid and expended by Beneficiary and the interest thereon shall be secured
by
the legal operation and effect of this Deed of Trust.
(e) Beneficiary's
acceptance of this assignment of the Leases shall not be deemed to constitute
Beneficiary a "mortgagee in possession," nor obligate Beneficiary to appear
in
or defend any proceeding relating to the Leases or to the Property, or to take
any action hereunder, expend any money, incur any expenses, or perform any
obligation or liability under the Leases, or assume any obligation for any
deposit delivered to Grantor by any tenant and not delivered to and accepted
by
Beneficiary as such. Beneficiary shall not be liable for any injury or damage
to
person or property in or about the Property due solely to Beneficiary's
acceptance of this assignment, or for Beneficiary's failure to collect or to
exercise diligence in collecting Rents, but shall be accountable only for Rents
that it shall actually receive. Neither the assignment of Leases and Rents,
nor
enforcement of Beneficiary's rights regarding the Leases and Rents (including
collection of Rents) nor possession of the Property by Beneficiary nor
Beneficiary's consent to or approval of any Lease (nor all of the same), shall
render Beneficiary liable on any obligation under or with respect to any Lease
or constitute affirmation of, or any subordination to, any Lease, occupancy,
use
or option. If Beneficiary seeks or obtains any judicial relief regarding Rents
or Leases, the same shall in no way prevent the concurrent or subsequent
employment of any other appropriate rights or remedies nor shall same constitute
any election of judicial relief for any foreclosure or any other purpose.
Beneficiary neither has nor assumes any obligations as lessor or landlord with
respect to any Lease. The rights of Beneficiary under this Section 9 shall
be
cumulative of all other rights of Beneficiary under the Loan Documents or
otherwise.
(f) Grantor
acknowledges that this Deed of Trust is a "Mortgage" as defined in the Operating
Lease and that pursuant to Article XXXIV of the Operating Lease (w) Tenant
will
receive the same notice, if any, given to Grantor by Beneficiary following
an
Event of Default, acceleration of the Debt or any foreclosure sale relating
to
this Deed of Trust, (x) Tenant will be permitted to cure any such Default on
Grantor's behalf within applicable cure periods (in which event Tenant shall
be
reimbursed by Grantor for all costs relating to such cure, including without
limitation, reasonable attorney's fees), and (y) Tenant will be permitted to
appear by its representative and to bid at any foreclosure sale relating to
this
Deed of Trust.
(g) Notwithstanding
Section 10(t) hereof, Grantor may enter into certain operating leases and
capital leases of personal property, hotel management systems or office
equipment, including, but not limited to: copiers, computers, fax machines
and
telephone equipment or other subordinate financing, copies of which have been
previously delivered to Beneficiary, of equipment used in the ordinary course
of
business in the operation of hotels and which, in the aggregate, have a payment
stream that does not exceed Five Thousand and No/100 Dollars ($5,000.00) per
year, and in the aggregate over the term of all such leases and subordinate
financing, have a payment stream that does not exceed Fifty Thousand and No/100
Dollars ($50,000.00) (the "FF&E
Financing").
Grantor shall have the right to request approval of an increase in the foregoing
amounts in connection with the replacement/renewal of operating leases, capital
leases and/or equipment, which approval shall not be unreasonably withheld,
conditioned or delayed.
10. Representations
Concerning Loan and Anti-Terrorism Laws
Grantor
represents, warrants and covenants as follows:
(a) Grantor
is duly organized and validly existing in good standing under the applicable
laws of the state of its creation as a limited partnership, and Grantor is
qualified to do business in and is in good standing in its state of formation
and in the state in which the Property is located, with full power, right,
authority and legal capacity to enter into this Deed of Trust, the Loan and
the
Loan Documents and to operate the Property as contemplated hereunder. Grantor
is
a valid limited partnership for federal and state income tax purposes. If the
issuance of any interest in Grantor is subject to any so-called "Blue Sky Laws"
and/or any federal securities laws and regulations, each such
issuance has been in compliance with all such laws and regulations to which
it
is subject. General Partner is the sole general partner of Grantor and is duly
organized and validly existing in good standing under the applicable laws of
the
state of its creation as a corporation, and General Partner is qualified to
do
business in and is in good standing in its state of formation and in the state
in which the Property is located. If the issuance of any interest in General
Partner is subject to any so-called "Blue Sky Laws" and/or any federal
securities laws and regulations, each such issuance has been in compliance
with
all such laws and regulations to which it is subject. General Partner is a
valid
corporation for federal and state income tax purposes.
(b) The
execution, delivery and performance of the Loan Documents executed or delivered
by Grantor to which it is a party and the consummation of the transactions
contemplated thereby: (i) have been duly authorized by all requisite actions;
(ii) have been approved
or consented to by all of their respective constituent entities whose approval
or consent is required to be obtained; (iii) do not require the approval or
consent of any governmental authority having jurisdiction over Grantor or the
Property; (iv) do not and will not constitute a violation of, or default under,
the governing instruments of Grantor or any applicable requirement of a
governmental authority; and (v) will not be in contravention of any court or
administrative order or ruling applicable to Grantor or the Property, or any
mortgage, indenture, agreement, commitment or instrument to which Grantor is
a
party or by which it or its assets are bound, nor create or cause to be created
any mortgage, lien, encumbrance, or charge against the assets of Grantor other
than those permitted by the Loan Documents.
(c) There
are
no actions, suits or proceedings pending, or, to the best knowledge of Grantor,
threatened, nor any pending or, to the best knowledge of Grantor threatened
labor disputes, against or affecting Grantor or the Property, or any other
collateral covered by the Loan Documents, or involving the validity or
enforceability of the Loan Documents or the priority of the liens created or
to
be created thereby, at law or in equity, or before or by any governmental
authority, which, if adversely determined, would, in the determination of
Beneficiary, either individually or in the aggregate, have a material adverse
affect on (i) the operation of the Property as contemplated hereunder, (ii)
the
ability of Grantor to pay all of its liabilities or to perform
all of its obligations in the manner and within the time
periods required under the Loan Documents, (iii) the validity, enforceability
or
consummation of the Loan Documents or the transactions contemplated thereby,
or
(iv) the title to the Property, the permitted uses of the Property or the value
of the security provided by the Loan Documents. Grantor has complied with all
requirements of ERISA.
(d) This
Deed
of Trust and the other Loan Documents are the legal, valid and binding
obligations of Grantor, and are not subject to any right of rescission, set-off,
counterclaim or defense, including the defense of usury, nor would the operation
of any of the terms of the Note, this Deed of Trust and the other Loan
Documents, or the exercise of any right thereunder, render this Deed of Trust
or
the other Loan Documents unenforceable, in whole or in part, or subject to
any
right of rescission, set-off, counterclaim or defense, including the defense
of
usury.
(e) All
certifications, permits, licenses and approvals required for the legal use,
occupancy and operation of the Property as a hotel, including, without
limitation, any applicable liquor license, certificate of completion and
occupancy permit, have been obtained and are in full force and effect. The
Property is free of material damage and is in good repair, and there is no
proceeding pending or, to the best of Grantor's knowledge, threatened for the
total or partial condemnation of, or affecting, the Property.
(f) All
of
the Improvements which were considered in determining the appraised value of
the
Property lie wholly within the boundaries and building restriction lines of
the
Property, no improvements on adjoining properties encroach upon the Property,
and no easements or other encumbrances upon the Land encroach upon any of the
Improvements, so as to affect the value or marketability of the Property. The
Property is contiguous to and has access to a physically and legally open
all-weather public street, has all necessary permits and approvals for ingress
and egress, is adequately serviced by public water, sewer systems and utilities
and is on one or more separate tax parcels, all of which are separate and apart
from any other property owned by Grantor or any other person. The Property
has
all necessary access by public roads or easements which in each case are not
terminable and are not subordinate to any mortgage other than this Deed of
Trust. The Property and all of the Improvements comply with all laws, ordinances
or regulations pertaining to the use or operation of the Property, including,
without limitation, applicable zoning, subdivision and land use, fire, health
and safety laws, regulations and ordinances.
(g) The
Property is not subject to any leases, licenses or other use or occupancy
agreements other than the Leases, the Management Agreement and the Franchise
Agreement disclosed and delivered to Beneficiary in connection with this Deed
of
Trust. Other than ENN, subject to the terms and conditions of the Operating
Lease, no person has any possessory interest in the Property or right to occupy
any portion thereof except under and pursuant to the provisions of the Leases
or
transient hotel guests in the ordinary course of Grantor's
business.
(h) The
financial statements of Grantor and/or Guarantor heretofore furnished to
Beneficiary and certified by a senior financial officer as true, correct and
complete as of the end of and for such period are, as of the date specified
therein, complete and correct in all material respects and fairly present the
financial condition of Grantor and Guarantor and
are,
with respect
to the corporate general partner of Grantor, prepared in accordance with GAAP
and the Uniform System of Accounts for hotel and motel properties as approved
by
the American Hotel and Motel Association (as in effect from time to time, the
“Uniform
System of Accounts”)
applied on a consistent basis. Grantor and/or Guarantor does not on the date
hereof have any contingent liabilities, liabilities for taxes, unusual forward
or long-term commitments or unrealized or anticipated losses from any
unfavorable commitments which in each case are known to Grantor and/or Guarantor
and which, in Grantor's opinion, are reasonably likely to result in a material
adverse effect on the Property or the operation thereof as a hotel, except
as
referred to or reflected or provided for in the financial statements heretofore
furnished to Beneficiary or as otherwise disclosed to Beneficiary herein. Since
the last date of such financial statements, there has been no material adverse
change in the financial condition, operations or business of Grantor and/or
Guarantor from that set forth in such financial statements as of the dates
thereof.
(i) To
the
best of Xxxxxxx's knowledge, the Franchise Agreement is in full force and effect
and there is no default, breach or violation existing thereunder by any party
thereto and no event (other than payments due but not yet delinquent) which,
with the passage of time or with notice and the expiration of any grace or
cure
period, would constitute a default, breach or violation by any party
thereunder.
(j) To
the
best of Xxxxxxx's knowledge, the Management Agreement is in full force and
effect and there is no default, breach or violation existing thereunder by
any
party thereto and no event (other than payments due but not yet delinquent)
which, with the passage of time or with notice and the expiration of any grace
or cure period, would constitute a default, breach or violation by any party
thereunder.
(k) Neither
the execution and delivery of the Loan Documents, Xxxxxxx's performance
thereunder, the recordation of this Deed of Trust, nor the exercise of any
remedies by Beneficiary, will adversely affect (i) Grantor's rights under the
Leases or the Operating Agreements or (ii) the licenses, registrations, permits,
certificates, authorizations and approvals necessary for the operation of the
Property as a hotel.
(l) The
Operating Lease and the Leases are in full force and effect and there is no
default, breach or violation existing thereunder by any party thereto and no
event (other than payments due but not yet delinquent) which, with the passage
of time or with notice and the expiration of any grace or cure period, would
constitute a default, breach or violation by any party thereunder.
(m) Since
the
date of the last inspection of the Property by Beneficiary: (i) no portion
of
the Property has been damaged and not repaired to Beneficiary's satisfaction
or
has been taken in condemnation or other similar proceedings; and (ii) no change
has occurred in the structure or physical condition of the Property other than
customary wear and tear.
(n) Since
the
date of the information and documentation relating to the Property furnished
to
Beneficiary, no material change in the Property has occurred.
(o) No
default has occurred and is continuing in the performance of any obligation
of
Grantor or any affiliate of Grantor which would be deemed an Event of Default
under the Loan Documents if they were in effect, or any instruments evidencing,
securing or guaranteeing any other loan.
(p) There
exists no fact, event or disclosure in connection with the Loan that reasonably
could be expected to cause the Loan to become delinquent or otherwise have
a
material adverse affect on the Loan or the Property.
(q) No
notice
of violation of any municipal ordinances has been filed against the Property
by
any municipal department.
(r) Grantor
has no knowledge of any latent or patent defects in the roof, foundations,
sprinkler mains, garage, structural, mechanical and HVAC systems and masonry
wall in any of the Improvements.
(s) The
survey of the Property delivered to Beneficiary in connection with this Deed
of
Trust has been performed by a duly licensed surveyor or registered professional
engineer in the jurisdiction in which the Property is situated and does not
fail
to reflect any material matter affecting the Property or the title
thereto.
(t) Grantor
is the owner of all of the furniture, fixtures and equipment (but not
"Inventory",
as
defined in the Uniform System of Accounts) located on or used in connection
with
the Property, except for certain capital leases for furniture, fixtures and
equipment as required under the Franchise Agreement, if any, and the personal
property, subject to the FF&E Financing.
(u) Intentionally
omitted.
(v) The
"Other
Leases"
(as
defined in the Operating Lease) are in full force and effect and there is no
default, breach or violation existing thereunder by any party thereto and no
event (other than payments due but not yet delinquent) which, with the passage
of time or with notice and the expiration of any grace or cure period, would
constitute a default, breach or violation by any party thereunder.
(w) There
are
no termination payments or other damage amounts (as described in Article XVI
of
the Operating Lease) deferred, accrued or otherwise due and owing by Grantor
under the Operating Lease or the Other Leases.
(x) No
portion of the Property has been or will be purchased, improved, equipped or
furnished with proceeds of any illegal activity.
(y) Grantor,
and to the best of Grantor's knowledge, after having made diligent inquiry,
(a)
each Person owning an
interest of twenty percent (20%) or more in
Grantor and in Grantor's general partner, managing member or manager, as
appropriate, (b) each Guarantor, (c) Manager, and (d) each tenant at the
Property: (i) is not currently identified on the OFAC List, and (ii) is not
a
Person with whom a citizen of the United States is prohibited to engage in
transactions by any trade embargo, economic sanction, or other prohibition
of
United States law, regulation, or Executive Order of the President of the United
States. Grantor has implemented procedures, and will consistently apply those
procedures throughout the term of the Loan, to ensure the foregoing
representations and warranties remain true and correct during the term of the
Loan.
(z) Grantor
shall comply with all Requirements of Law relating to money laundering,
anti-terrorism, trade embargos and economic sanctions, now or hereafter in
effect. Upon Beneficiary's request from time to time during the term of the
Loan, Grantor shall certify in writing to Beneficiary that Grantor's
representations, warranties and obligations under subsection (y) above and
this
subsection (z) remain true and correct and have not been breached. Grantor
shall
immediately notify Beneficiary in writing if any of such representations,
warranties or covenants are no longer true or have been breached or if Grantor
has a reasonable basis to believe that they may no longer be true or have been
breached. In connection with such an event, Grantor shall comply with all
Requirements of Law and directives of Governmental Authorities and, at
Beneficiary's request, provide to Beneficiary copies of all notices, reports
and
other communications exchanged with, or received from, Governmental Authorities
relating to such an event. Grantor shall also reimburse Beneficiary any expense
incurred by Beneficiary in evaluating the effect of such an event on the Loan
and Beneficiary's interest in the collateral for the Loan, in obtaining any
necessary licenses from Governmental Authorities as may be necessary for
Beneficiary to enforce its rights under the Loan Documents, and in complying
with all Requirements of Law applicable to Beneficiary as the result of the
existence of such an event and for any penalties or fines imposed upon
Beneficiary as a result thereof.
11. Single
Purpose Entity; Authorization
Grantor
represents and warrants, and covenants for so long as any obligations secured
by
this Deed of Trust remain outstanding, as follows:
(a) Grantor
does not and will not own any asset or property other than those related to
or
derived from: (i) the Property; and (ii) personal property necessary for the
ownership or operation of the Property.
(b) Grantor
does not and will not engage in any business activity unrelated to the Property;
other than the ownership, management and operation of the Property, and Grantor
will conduct and operate its business in all material respects as presently
conducted and operated and will not change the use of the Property.
(c) Grantor
will maintain an arms-length relationship with its affiliates and enter into
transactions with its affiliates only on a commercially reasonable
basis.
(d) Grantor
has not incurred and will not incur any indebtedness, secured or unsecured,
direct or indirect, absolute or contingent (including guaranteeing any
obligation), other than the Debt and trade and operational debt, and other
ordinary operating expenses including property management fees, incurred in
the
ordinary course of business with trade creditors and in amounts as are customary
and reasonable under the circumstances. This prohibition includes any debt
secured or to be secured by any of Grantor’s key principal’s, general partner’s
or partner’s equity interests in Grantor. Except with Beneficiary's prior
written approval in each instance, no indebtedness other than the Debt is or
shall be secured by the Property. Beneficiary's approval shall be granted or
withheld at Beneficiary's sole discretion.
(e) Grantor
has not made and will not make any loans or advances to any other person or
entity (including any constituent party, Guarantor or any affiliate of Grantor,
or any constituent of Guarantor), except in de
minimus
amounts
in the ordinary course of business and of the character of trade or operational
expenses, or buy or hold evidence of indebtedness issued by any other person
or
entity (other than cash and investment-grade securities).
(f) Grantor
has done or caused to be done, and will do or cause to be done, all things
necessary to preserve its existence, to observe all limited partnership
formalities and other organizational formalities, and Grantor will not, nor
will
Grantor permit any party to amend, alter, change or repeal the partnership
certificate, partnership agreement, or other organizational documents, as the
case may be, of Grantor or Guarantor in a manner which would adversely affect
the Grantor's existence as a single purpose entity.
(g) Grantor
will maintain books and records, bank accounts and financial statements, showing
its assets and liabilities, separate from any other person or entity, and
Grantor and Guarantor will each file or cause to be filed tax returns separate
from those of any other entity, will not file a consolidated federal income
tax
return with any other entity, nor shall it have its assets listed on the
financial statement of any other entity. Grantor shall not change the principal
place of its business or the jurisdiction of formation without the prior written
consent of Beneficiary.
(h) Grantor
is and will be, and at all times (i) will hold itself out to the public as
a
legal entity separate and distinct from any other entity (including any
affiliate or constituent party of Grantor or any affiliate or constituent party
of Guarantor), (ii) will use and conduct its business in its own name; (iii)
will not identify itself as a division of any other person or entity, and (iv)
will promptly correct any known misunderstanding regarding its separate
entity.
(i) Neither
Grantor nor any constituent party will dissolve, liquidate, consolidate, merge
or sell all or substantially all of the assets of the Grantor, or take any
action that is reasonably likely to cause the Grantor to become
insolvent.
(j) Grantor
will hold all of its assets in its own name. Grantor will not commingle its
funds and other assets with those of any other person or entity, or pledge
its
assets for the benefit of any other person or entity affiliate or constituent
party of Grantor, any affiliate or constituent party of Guarantor, or any other
person, except in connection with the Loan from Beneficiary.
(k) Grantor
will not guarantee or become obligated for the debts of any other entity or
person except for the debt evidenced by the Loan Documents.
(l) Grantor
will not hold out its credit as being available to satisfy the obligations
of
any other person or entity.
(m) Grantor
will not acquire the obligations or securities of its affiliates, members,
shareholders or partners.
(n) Grantor
will pay its own liabilities and expenses only out of its funds.
(o) Grantor
will pay the salaries of its own employees, if any, from its own
funds.
(p) Grantor
will maintain a sufficient number of employees, if any, in light of its
contemplated business operations.
(q) Grantor
will allocate fairly and reasonably any overhead expenses that are shared with
an affiliate, including paying for office space and services performed by any
employee of an affiliate.
(r) Grantor
will use separate stationery, invoices and checks bearing its own
name.
(s) Grantor
will maintain adequate capital in light of its contemplated business
operations.
12. Maintenance
of Property
Grantor
shall cause the Property to be maintained in a good and safe condition and
repair. The Improvements and the Equipment shall not be removed, demolished
or materially
altered (except for normal replacement of the Equipment) without the
prior written
consent of Beneficiary. Grantor shall promptly comply with all laws, orders
and
ordinances affecting the Property, or the use thereof, subject to Grantor's
right to contest the same as provided in this Deed of Trust. Grantor shall
promptly repair, replace or rebuild any part of the Property which may be
destroyed by any casualty, or become damaged, worn or dilapidated, or which
may
be affected by any proceeding of the character referred to in Section 8 hereof,
and shall complete and pay for any structure at any time in the process of
construction or repair on the Land. Except as expressly permitted in writing
by
Beneficiary, Grantor shall not initiate, join in, acquiesce in, or consent
to
any change in any private restrictive covenant, zoning law or other public
or
private restriction limiting or defining the uses which may be made of the
Property or any part thereof. If under applicable zoning provisions the use
of
all or any portion of the Property is or shall become a nonconforming use,
Grantor will not cause or permit such nonconforming use to be discontinued
or
abandoned without the prior written consent of Beneficiary. Grantor shall not
without the prior written consent of Beneficiary: (a) change the use of the
Land
as currently configured and utilized; (b) permit or suffer to occur any waste
on
or to the Property or to any portion thereof; or (c) take any steps whatsoever
to convert the Property, or any portion thereof, to a condominium or cooperative
form of ownership.
Grantor shall not enter into any license, easement, covenant or other agreement
affecting the Property without the prior written consent of
Beneficiary.
13. Transfer
or Encumbrance of the Property
(a) Grantor
acknowledges that Beneficiary has examined and relied on the creditworthiness
and experience of Grantor and its general partner, limited partners and
beneficial owners in owning and operating properties such as the Property in
agreeing to make the loan secured by this Deed of Trust, and that Beneficiary
will continue to rely on Grantor's interest in the Property as a means of
maintaining the value of the Property as security for repayment of the Debt.
Grantor acknowledges that Beneficiary has a valid interest in maintaining the
value of the Property so as to ensure that, should Grantor default in the
repayment of the Debt, Beneficiary can recover the Debt by a sale of the
Property. Grantor shall not, without the prior written consent of Beneficiary,
sell, convey,
alienate, mortgage, encumber, pledge or otherwise transfer its interest in
the
Property or any part thereof, or permit the Property or any part thereof to
be
sold, conveyed, alienated, mortgaged, encumbered, pledged or otherwise
transferred.
(b) A
sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer within the
meaning of this Section shall be deemed to include: (i) a land contract or
other
form of installment sales agreement wherein Grantor agrees to sell its interest
in the Property or any part thereof for a price to be paid in installments;
(ii)
an agreement by Grantor leasing all or a substantial part of the Property for
other than actual occupancy by a space tenant thereunder or a sale, assignment
or other transfer of, or the grant of a security interest in, Grantor's right,
title and interest in and to any Leases or any Rents; (iii) if Grantor,
Guarantor, or any general partner of Grantor is a corporation, the voluntary
or
involuntary sale, exchange, conveyance or transfer of such corporation's stock
(or the stock of any corporation directly or indirectly controlling such corporation
by operation of law or otherwise) or the creation or issuance of new stock,
in
one or a series of transactions by which an aggregate of more than forty-nine
percent (49%) of such corporation's stock shall be vested in a party or parties
who are not now stockholders; (iv) if Grantor, Guarantor or any general partner
or managing member (or if no managing member, any member) of Grantor is a
limited or general partnership or joint venture, the change, removal or
resignation of a general partner, managing partner or joint venturer, or the
transfer or pledge of the partnership interest of any general partner, managing
partner or joint venturer or any profits or proceeds related thereto or the
transfer, pledge, issuance or creation, in one or a series of transactions,
of
limited partnership interests by which more than forty-nine percent (49%) of
such limited partnership interests shall be vested in a party or parties who
are
not now limited partners; and (v) if Grantor or any general partner or member
of
Grantor is a limited liability company, (A) the change, removal or resignation
of a managing member (or if no managing member, any member) or the transfer
of
the membership interests or "units" of a managing member (or if no managing
member, any member) or any profits or proceeds relating to such membership
interests or "units", or (B) the voluntary or involuntary sale, exchange,
conveyance or transfer of membership interests or "units" in such limited
liability company, or the creation or issuance of new membership
interests or "units" in one or a series of transactions by which an aggregate
of
more than forty-nine percent (49%) of such company's membership interests or
"units" shall be vested in a party or parties who are not now members;
provided,
however,
that
such limitation shall not operate to restrict the free transferability of stock
in Equity Inns, Inc., a Tennessee corporation or, subject to subsection (iv)
above, issuance of limited partnership units in Guarantor. Notwithstanding
the
foregoing, the following shall not constitute a transfer for purposes of this
Section 13: (x) transfer by devise or descent or by operation of law upon the
death of a partner of Grantor or of any Guarantor, or (y) a sale or transfer
of
a partnership interest in Grantor by a current partner to an immediate family
member (i.e., parents, spouses, siblings, children or grandchildren) of such
partner or to a trust for the benefit of an immediate family member of such
partner.
(c) No
sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of Xxxxxxx’s
interest in the Property, shall be permitted during the term of the Loan without
Beneficiary's prior written approval. Beneficiary shall not be required to
demonstrate any actual impairment of its security or any increased risk of
default hereunder in order to declare the Debt immediately due and payable
upon
Grantor's sale, conveyance, alienation, mortgage, encumbrance, pledge or
transfer its interest in the Property without Beneficiary's consent. This
provision shall apply to every sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer its interest in the Property regardless of
whether voluntary or not, or whether or not Beneficiary has consented to any
previous sale, conveyance, alienation, mortgage, encumbrance, pledge or transfer
of Grantor’s interest in the Property.
(d) Beneficiary's
consent to one sale, conveyance, alienation, mortgage, encumbrance, pledge
or
transfer of Xxxxxxx’s interest in the Property shall not be deemed to be a
waiver of Beneficiary's right to require such consent in the future. Any sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Property made in contravention of this Section shall be null and void and of
no
force or effect.
(e) Grantor
agrees to bear and shall pay or reimburse Beneficiary on demand for all expenses
(including, without limitation, Beneficiary's out-of-pocket attorneys’ fees and
disbursements, title search costs and title insurance endorsement premiums)
incurred by Beneficiary in connection with the review, approval or disapproval,
and documentation of any such sale, conveyance, alienation, mortgage,
encumbrance, pledge or transfer.
14. Certificates:
Affidavits
(a) Within
ten (10) days after request by Beneficiary, Grantor shall furnish Beneficiary
with a statement, duly acknowledged and certified, setting forth: (i) the amount
of the original principal amount of the Note; (ii) the then outstanding
principal balance of the Note; (iii) the rate of interest of the Note; (iv)
the
date on which installments of interest and/or principal were last paid; (v)
any
offsets or defenses to the payment of the Debt; and (vi) that the Note, this
Deed of Trust and the other Loan Documents are valid, legal and binding
obligations of Grantor, which have not been modified or if modified, giving
particulars of such modification.
(b) Within
ten (10) days after request by Grantor, Beneficiary shall furnish Grantor with
a
statement, duly acknowledged and certified, setting forth: (i) the amount of
the
original principal amount of the Note; (ii) the then outstanding principal
balance of the Note; (iii) the rate of interest of the Note; (iv) the date
on
which installments of interest and/or principal were last paid; (v) any offsets
or defenses to the payment of the Debt; and (vi) that the Note, this Deed of
Trust and the other Loan Documents have not been modified or if modified, giving
particulars of such modification.
(c) Within
ten (10) days after written request by Beneficiary, Grantor shall furnish
Beneficiary with a certificate reaffirming all representations and warranties
of
Grantor set forth herein and in the other Loan Documents as of the date
requested by Beneficiary or, to the extent of any changes to any such
representations and warranties, so stating such changes.
(d) Grantor
shall deliver to Beneficiary upon request, tenant estoppel certificates from
each tenant under a Lease in form and substance as required by such Lease or
subordination, non-disturbance and attornment agreement; provided,
however,
that
Grantor shall not be required to deliver such certificates more frequently
than
once in any consecutive twelve (12) month period except upon any sale or
transfer (or proposed sale or transfer) of the Loan by Xxxxxxxxxxx.
15. Changes
in the Laws Regarding Taxation
If
any
law is enacted, adopted or amended after the date of this Deed of Trust which
deducts the Debt from the value of the Property for the purpose of taxation
or
which imposes a tax, either directly or indirectly, on the Debt or Beneficiary's
interest in the Property, Grantor will pay such tax, with interest and penalties
thereon, if any. In the event Beneficiary or its counsel determines that the
payment of such tax or interest and penalties by Grantor would be unlawful
or
taxable to Beneficiary or unenforceable or provide the basis for a defense
of
usury, then in any such event, Beneficiary shall have the option, by written
notice of not less than one hundred eighty (180) days, to declare the Debt
immediately due and payable.
16. No
Credits on Account of the Debt
Grantor
will not claim, demand or be entitled to any credit or credits on account of
the
Debt for any part of the Taxes or Other Charges assessed against the Property,
or any part thereof, and no deduction shall otherwise be made or claimed from
the assessed value of the Property, or any part thereof, for real estate tax
purposes by reason of this Deed of Trust or the Debt. In the event such claim,
credit or deduction shall be required by law, Beneficiary shall have the option,
by written notice of not less than one hundred eighty (180) days, to declare
the
Debt immediately due and payable.
17. Documentary
Stamps
If
at any
time the United States of America, any State thereof or any subdivision of
any
such State shall require revenue or other stamps to be affixed to the Note
or
this Deed of Trust, or shall impose any other tax or charge on the same, Grantor
will pay for the same, with interest and penalties thereon, if any.
18. Controlling
Agreement
It
is
expressly stipulated and agreed to be the intent of Grantor and Beneficiary
at
all times to comply with applicable state law or applicable United States
federal law (to the extent that it permits Beneficiary to contract for, charge,
take, reserve, or receive a greater amount of interest than under state law)
and
that this Section shall control every other covenant and agreement in this
Deed
of Trust and the other Loan Documents. If the applicable law (state or federal)
is ever judicially interpreted so as to render usurious any amount called for
under the Note or under any of the other Loan Documents, or contracted for,
charged, taken, reserved, or received with respect to the Debt, or if
Beneficiary's exercise of the option to accelerate the maturity of the Note,
or
if any prepayment by Grantor results in Grantor having paid any interest in
excess of that permitted by applicable law, then it is Grantor's and
Beneficiary's express intent that all excess amounts theretofore collected
by
Beneficiary shall be credited on the principal balance of the Note and all
other
Debt (or, if the Note and all other Debt have been or would thereby be paid
in
full, refunded to Grantor), and the provisions of the Note and the other Loan
Documents immediately be deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the necessity of the execution of
any
new documents, so as to comply with the applicable law, but so as to permit
the
recovery of the fullest amount otherwise called for hereunder or thereunder.
All sums
paid
or agreed to be paid to Beneficiary for the use, forbearance, or detention
of
the Debt shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full stated term of the Debt
until payment in full so that the rate or amount of interest on account of
the
Debt does not exceed the maximum lawful rate from time to time in effect and
applicable to the Debt for so long as the Debt is outstanding. Notwithstanding
anything to the contrary contained herein or in any of the other Loan Documents,
it is not the intention of Beneficiary to accelerate the maturity of any
interest that has not accrued at the time of such acceleration or to collect
unearned interest at the time of such acceleration.
19. Books
and Records
Grantor
will maintain full and accurate books of accounts and other records reflecting
the operations of the Property. Within forty-five (45) days after the end of
each calendar month until such time as the Loan is sold into a securitization,
and through the end of a calendar quarter if the Loan is sold into a
securitization in the first or second month of a calendar quarter, Grantor
shall
furnish, or cause to be furnished to Beneficiary the following items, each
certified by a senior financial officer of Grantor (or as to those statements
prepared by Xxxxxx, by an officer of Tenant) as true, correct and complete
as of
the end of and for such period (subject to normal year-end adjustments), and
as
having been prepared in accordance with the Uniform System of Accounts and
generally accepted accounting principles, consistently applied: (a) a written
occupancy statement dated as of the last day of the most recently ended calendar
month identifying each of the Leases by the term, space occupied, rental
required to be paid, security deposit paid, any rental concessions, and
identifying any defaults or payment delinquencies thereunder; (b) monthly and
year to date operating statements detailing the total revenues received and
total expenses incurred in connection with the ownership and operation of the
Property, including a comparison of the budgeted income and expenses and the
actual income and expenses for such month and the year to date (which operating
information shall include the Improvements); (c) a written statement dated
as of
the last day of the most recently ended month showing the percentage of hotel
or
motel rooms rented and occupied during such month and the average daily room
rate charged during such month. Grantor will provide a detailed explanation
of
any variances of ten percent (10%) or more between budgeted and actual amounts
for such periods; and (d) a detailed list of capital expenditures for the
calendar month just ended; and (e) any reports, franchise reports, certificates,
budgets, business plan, capital expenditures plan of financial statements to
the
extent delivered by Tenant to Grantor pursuant to the Operating
Lease.
After
the
loan is sold into a securitization, within sixty (60) days after the end of
each
calendar quarter (calendar quarters run as follows: January through March;
April
through June; July through September; and October through December), Grantor
shall furnish, or cause to be furnished to Beneficiary the following items,
each
certified by a senior financial officer of Grantor (or as to those statements
prepared by Tenant, by an officer of Tenant) as true, correct and complete
as of
the end of and for such period (subject to normal year-end adjustments), and
as
having been prepared in accordance with Uniform System of Accounts and generally
accepted accounting principles, consistently applied: (a) a written occupancy
statement, if applicable, dated as of the last day of the most recently ended
calendar quarter identifying each of the Leases by the term, space occupied,
rental required to be paid, security deposit paid, any rental concessions,
and
identifying any defaults or payment delinquencies thereunder; (b) quarterly
and
year to date operating statements detailing the total revenues received and
total expenses incurred in connection with the ownership and operation of the
Property, including a comparison of the budgeted income and expenses and the
actual income and expenses for such month and the year to date (which operating
information shall include the Improvements); (c) a written statement dated
as of
the last day of the most recently ended quarter showing the percentage of hotel
or motel rooms rented and occupied during such month and the average daily
room
rate charged during such month. Grantor will provide a detailed explanation
of
any variances of ten percent (10%) or more between budgeted and actual amounts
for such periods; and (d) a detailed list of capital expenditures for the
calendar quarter just ended; and (e) any reports, franchise reports,
certificates, budgets, business plan, capital expenditures plan or financial
statements to the extent delivered by Tenant to Grantor pursuant to the
Operating Lease.
Within
ninety (90) days after the end of each calendar year, Grantor shall furnish,
a
statement of the financial affairs and condition of the Property (which
operating information shall include the Improvements), including a statement
of
profit and loss statement (including a comparison of the budgeted income and
expenses to the actual income and expenses) and a balance sheet for the Property
(and the Grantor) for the immediately preceding calendar year, prepared by
Grantor or Tenant, as applicable.
Grantor
shall deliver to Beneficiary on or before December 31 of any calendar year
an
operating budget for the next succeeding year, a capital budget for the next
succeeding year, and a management plan for the Property for the next succeeding
calendar year, all in such detail as Beneficiary may reasonably request. Grantor
shall promptly after receipt deliver to Beneficiary copies of all quality
inspection reports or similar reports or inspection results that are delivered
to it by the Manager.
At
any
time and from time to time Grantor shall deliver to Beneficiary or its agents
such other financial data as Beneficiary or its agents shall reasonably request
with respect to Grantor and the ownership, maintenance, use and operation (and,
if applicable, conversion and construction) of the Property. All information
required to be furnished to Beneficiary pursuant to this Section shall be on
the
form provided by Beneficiary (which form shall accompany Beneficiary's
request).
20. Performance
of Other Agreements
(a) Grantor
shall observe and perform each and every term to be observed or performed by
Grantor pursuant to the terms of any agreement or instrument affecting or
pertaining to the Property or title to the Property for the full use and
enjoyment (including without limitation, covenants, conditions and restrictions,
easement agreements, access agreements and the like) and excluding the Operating
Lease (the "Operating
Agreements").
Upon
written request by Beneficiary, Grantor shall deliver to Beneficiary estoppel
certificates from each party to the
Operating Agreements in form and substance satisfactory to Beneficiary;
provided,
however,
that Grantor
shall not be required to deliver such certificates more frequently than once
in
any consecutive twelve (12) month period except upon any sale or transfer (or
proposed sale or transfer) of the Loan by Beneficiary.
(b) Grantor
will not surrender its interests under the Operating Agreements or terminate,
cancel, modify, change, supplement, alter or amend the Operating Agreements
orally or in writing without the express written consent of Beneficiary, and
any
such termination, cancellation, modification, change, supplement, alteration
or
amendment of the Operating Agreements without the prior written consent thereto
of Beneficiary shall be void and of no force or effect. No release or
forbearance of any of Grantor's obligations under the Operating Agreements,
pursuant to the Operating Agreements or otherwise, shall release Grantor from
any of its obligations under this Deed of Trust, including its obligations
with
respect to the payment of all sums as provided for in the Operating Agreements
and the performance of all of the terms, conditions and agreements contained
in
the Operating Agreements to be kept, performed and complied with by the Grantor
therein.
(c) Grantor
shall observe and perform each and every term to be observed or performed by
Grantor pursuant to the terms of the Operating Agreements and shall:
(i) diligently
proceed to cure any default and satisfy any demand made upon it pursuant to
the
Operating Agreements;
(ii)
promptly
notify Beneficiary in writing of any default notice received by Grantor under
the Operating Agreements and provide Beneficiary with copies of any notices
delivered in connection therewith;
(iii) promptly
enforce the performance and observance of all of the covenants and agreements
required to be performed and/or observed by the other party under the Operating
Agreements; and
(iv) grant
Beneficiary the right, but Beneficiary shall be under no obligation, to pay
any
sums and to perform any act or take any action as may be appropriate to cause
all the terms, covenants and conditions of the Operating Agreements on the
part
of Grantor to be performed or observed to be promptly performed or observed
on
behalf of Grantor, to the end that the rights of Grantor in, to and under said
Operating Agreements shall be kept free from default.
21. Further
Assurances
(a) Grantor
will, at the cost of Grantor, and without expense to Beneficiary, do, execute,
acknowledge and deliver all and every such further acts, deeds, conveyances,
mortgages, assignments, notices of assignment, Uniform Commercial Code financing
statements or continuation statements, transfers and assurances as Beneficiary
shall, from time to time, require, for the better assuring, conveying,
assigning, transferring, and confirming unto Beneficiary the property and rights
hereby mortgaged, given, granted, bargained, sold, alienated, enfeoffed,
conveyed, confirmed, pledged, assigned and hypothecated or intended now or
hereafter so to be, or which Grantor may be or may hereafter become bound to
convey or assign to Beneficiary, or for carrying out the intention or
facilitating the performance of the terms of this Deed of Trust or for filing,
registering or recording this Deed of Trust. Grantor, on demand, will execute
and deliver and hereby authorizes Beneficiary to execute in the name of Grantor
or without the signature of Grantor to the extent Beneficiary may lawfully
do
so, one or more financing statements, chattel mortgages or other instruments,
to
evidence more effectively the security interest of Beneficiary in the Property.
Grantor grants to Beneficiary an irrevocable power of attorney coupled with
an
interest for the purpose of exercising and perfecting any and all rights and
remedies available to Beneficiary at law and in equity, including, without
limitation, such rights and remedies available to Beneficiary pursuant to this
Section; provided,
however,
that so
long as Grantor is in compliance with the terms and conditions of this Deed
of
Trust, Beneficiary will first seek Grantor's assistance in exercising and
perfecting such rights and remedies.
(b) Grantor
acknowledges that Beneficiary intends to sell the loan evidenced by the Note
and
the Loan Documents to a party who may pool the Loan with a number of other
loans
and to have the holder of such loans grant participations therein or issue
one
or more classes of Mortgage-Backed, Pass--Through Certificates or other
securities evidencing a beneficial interest in a rated or unrated public
offering or private placement (the "Securities").
The
Securities may be rated by one or more national rating agencies. Xxxxxxx
acknowledges and agrees that Beneficiary may, at any time, sell, transfer or
assign the Note, this Deed of Trust and the other Loan Documents, and any or
all
servicing rights with respect thereto, or grant participations therein or issue
Mortgage-Backed, Pass-Through Certificates or other securities evidencing a
beneficial interest in a rated or unrated public offering or private placement.
In this regard, Xxxxxxx agrees to make available to Beneficiary all information
concerning its business and operations which Beneficiary reasonably requests.
Beneficiary may share such information with the investment banking firms, rating
agencies, accounting firms, law firms and other third-party advisory firms
involved with the Loan or the Securities. Beneficiary may forward to each
purchaser, transferee, assignee, servicer, participant or investor in such
securities or any credit rating agency rating such Securities (collectively,
the
"Investor")
and
each prospective Investor, all documents and information which Beneficiary
now
has or
may
hereafter acquire relating to Grantor and the Property, whether furnished by
Grantor or otherwise, as Beneficiary determines necessary or desirable
consistent with full disclosure for purposes of marketing and underwriting
the
Loan. Grantor shall furnish and hereby consents to Beneficiary furnishing to
such Investors or such prospective Investors any and all information
concerning Grantor
and the Property as may be reasonably requested by Beneficiary, any Investor
or
any prospective Investor in connection with any sale, transfer or participation
interest. It is understood that the information provided by Grantor to
Beneficiary may ultimately be incorporated into the offering documents for
the
Securities and thus such information may be disclosed to Investors and
prospective Investors. Beneficiary and all of the aforesaid third-party advisors
and professional firms shall be entitled to rely on the information supplied
by,
or on behalf of, Grantor. Beneficiary, at its sole option, may also elect to
split the Loan into two or more loans, each secured by liens on the Property,
and sell, assign, pledge or otherwise hypothecate one or more of such loans
to
third parties. Grantor shall reasonably cooperate in all such efforts by
executing and delivering all such documents, certificates, instruments and
other
things to evidence or confirm Xxxxxxx's obligations hereunder, and in no such
event shall the Debt or Grantor's obligations hereunder be increased as a result
thereof. Upon any transfer or proposed transfer contemplated above and by the
Loan Documents, at Beneficiary's request, Grantor shall provide a reasonably
customary estoppel certificate to the Investor or any prospective
Investor.
22. Recording
of Deed of Trust
Grantor
forthwith upon the execution and delivery of this Deed of Trust and thereafter,
from time to time, will cause this Deed of Trust, and any security instrument
creating a lien or security interest or evidencing the lien thereof upon the
Property and each instrument of further assurance to be filed, registered or
recorded in such manner and in such places as may be required by any present
or
future law in order to publish notice of and fully to protect the lien or
security interest thereof upon, and the interest of Beneficiary in, the
Property. Grantor will pay all filing, registration or recording fees, and
all
expenses incident to the preparation, execution and acknowledgment of this
Deed
of Trust, any mortgage supplemental thereto, any security instrument with
respect to the Property and any instrument of further assurance, and all
federal, state, county and municipal taxes, duties, imposts, assessments and
charges arising out of or in connection with the execution and delivery of
this
Deed of Trust, any mortgage supplemental thereto, any security instrument with
respect to the Property or any instrument of further assurance, except where
prohibited by law so to do. GRANTOR
SHALL HOLD HARMLESS AND INDEMNIFY BENEFICIARY, ITS SUCCESSORS AND ASSIGNS,
AGAINST ANY LIABILITY INCURRED BY
REASON
OF THE IMPOSITION OF ANY TAX ON THE MAKING AND RECORDING OF THIS DEED OF
TRUST.
23. Reporting
Requirements
Grantor
agrees to give prompt written notice to Beneficiary of the insolvency or
bankruptcy filing of Grantor or any partner thereof, or the insolvency or
bankruptcy filing of Guarantor.
24. Events
of Default
The
term
"Event
of Default"
as used
herein shall mean the occurrence or happening, at any time and from time to
time, of any one or more of the following:
(a) if
any
regularly scheduled monthly payment of principal or interest due on the Note,
is
not paid prior to the fifth (5th)
day
after the date such payment is due, or if the entire Debt is not paid on or
before the Maturity Date;
(b) if
any
other monetary sum (other than as specified in Section 24(a) and including,
without limitation, any required deposit into any of the other Accounts) is
not
paid prior to the fifth (5th) day following written notice from Beneficiary
to
Grantor that such sum is due;
(c) subject
to Xxxxxxx's right to contest as provided herein, if any of the Taxes or Other
Charges are not paid when due and payable;
(d) if
the
Policies are not kept in full force and effect, or if the Policies are not
delivered to Beneficiary upon written request;
(e) if
Grantor transfers or encumbers any portion of the Property in a manner
inconsistent with the terms of this Deed of Trust;
(f) if
any
representation or warranty of Grantor, or of Guarantor, made herein, in any
Loan
Document, any guaranty, or in any certificate, report, financial statement
or
other instrument or document furnished to Beneficiary shall have been false
or
misleading in any material respect when made;
(g) if
Grantor or Guarantor shall make an assignment for the benefit of creditors,
or
if Grantor shall generally not be paying its debts as they become
due;
(h) if
a
receiver, liquidator or trustee of Grantor or of Guarantor shall be appointed,
or if Grantor or Guarantor shall be adjudicated bankrupt or insolvent, or if
any
petition for bankruptcy, reorganization or arrangement pursuant to federal
bankruptcy law, or any similar federal or state law, shall be filed by or
against, consented to, or acquiesced in by, Grantor or Guarantor or if any
proceeding for the dissolution or liquidation of Grantor or of Guarantor shall
be instituted; provided,
however,
that
such appointment, adjudication, petition or proceeding, if involuntary and
not
consented to by Grantor or Guarantor, shall constitute an Event of Default
only
if not being discharged, stayed or dismissed within ninety (90)
days;
(i) if
Grantor shall be in default under any other mortgage or security agreement
covering any part of the Property, whether it be superior or junior in lien
to
this Deed of Trust;
(j) subject
to Xxxxxxx's right to contest as provided herein, if the Property becomes
subject to any mechanic's, materialman's, water, sewer, vault or other lien or
encumbrance except a lien or encumbrance which is not insured over, bonded
or discharged
to Beneficiary's
satisfaction within thirty (30) days, for local real estate taxes and
assessments not then due and payable;
(k) if
Grantor fails to cure promptly any violations of laws, ordinances or regulations
affecting the Property or pertaining to its use or operation;
(l) except
as
permitted in this Deed of Trust, (i) the actual or threatened alteration,
improvement, demolition or removal of any of the Improvements or (ii) the
development, subdividing, leasing or selling of, or construction on, that
portion of the Property not necessary for the operation of the Improvements,
if
any, or the leasing or licensing of portions of the Property for
telecommunications and related facilities, billboards or other uses (as more
particularly set forth in Article VII of the Operating Lease) without the prior
written consent of Beneficiary;
(m) if
there
shall occur any damage to the Property in any manner which is not covered by
insurance solely as a result of Grantor's failure to maintain insurance required
in accordance with this Deed of Trust;
(n) if
without Beneficiary's prior written consent, not to be unreasonably withheld,
conditioned or delayed: (i) the manager under the Management Agreement (or
any
succeeding management agreement) resigns or is removed and is not replaced
with
a manager approved in writing by Xxxxxxxxxxx within thirty (30) days
(provided,
however,
Beneficiary shall have the right to pre-approve potential substitute managers,
as proposed by Xxxxxxx, in Beneficiary’s sole, but reasonable discretion); or
(ii) there is a termination or expiration of the Management Agreement (or any
succeeding management agreement). Notwithstanding the foregoing, Beneficiary
hereby approves the following as replacement managers (the "Replacement Managers");
provided,
however,
(i) the
replacement management agreement must provide for base management fees in an
amount not to exceed five percent (5%) of gross revenues generated by the
Property, including incentive management fees and all other fees; and (ii)
the
Replacement Manager must execute a subordination agreement with Beneficiary,
in
form and content acceptable to Beneficiary, in Beneficiary’s sole, but
reasonable, discretion:
Innkeepers
Hospitality;
Hostmark
Hospitality;
Crestline
Capital;
Promus
Hotels, Inc.;
Waterford
Hotel Group;
XxXxxxxx
Hotel Management Inc;
Crossroads
Hospitality Company, L.L.C
Interstate
Hotels and Resorts;
Hilton
Hotels
Marriott
Hotels
Starwood
Hotels
First
Hospitality
MMI
Hotel
Group
Maximum
Hotels
Huntington
Hotels
Hyatt
Corporation
Gateway
Hospitality
Greenpark
Management
Xxxxxx
Hospitality Management
Paramount
Hospitality Management
Notwithstanding
any provision contained herein to the contrary, upon a transfer or sale of
the
Property in accordance with Section 13 hereof, any replacement manager shall
be
subject in all respects to the review, approval and prior written consent of
Beneficiary; and the foregoing list of pre-approved Replacement Managers, which
is intended solely for the benefit of Grantor, shall not apply.
(o) unless
Grantor or ENN has entered into an acceptable Substitute Franchise Agreement,
without Beneficiary's prior written consent, there is a material change in,
termination, failure to renew, expiration or cancellation of the Franchise
Agreement, or if the Property is operated under the name of any hotel chain
or
system other than “Hampton Inn”;
(p)
if
without Beneficiary’s prior written consent, there is an amendment, termination
or surrender of the Operating Lease;
(q) if
Grantor or Guarantor shall be in default beyond any applicable notice and cure
period under any term, covenant, or condition of this Deed of Trust or any
of
the other Loan Documents; and
(r) if
for
more than thirty (30) days after receipt of written notice from Beneficiary,
Grantor shall continue to be in default under any term, covenant, or condition
of the Loan Documents other than as specified in any of subsections of this
Section; provided,
however,
that if
the cure of any such default cannot reasonably be effected within such thirty
(30) day period and Grantor shall have promptly and diligently commenced to
cure
such default within such thirty (30) day period, then the period to cure shall
be deemed extended for up to an additional sixty (60) days (for a total of
ninety (90) days from Beneficiary's default notice) so long as Grantor
diligently and continuously proceeds to cure such default to Beneficiary's
satisfaction.
25. Late
Payment Charge: Servicing Fees
If
any
portion of the Debt is not paid prior to the tenth (10th) day after the date
such payment is due (other than when the entire Debt is due on the Maturity
Date
or earlier accelerated maturity date) Grantor shall pay to Beneficiary upon
demand an amount equal to the lesser of: (i) the maximum amount permitted by
applicable law, and (ii) five percent (5%) of such overdue portion of the Debt,
to defray the expense incurred by Beneficiary in handling and processing such
delinquent payment and to compensate Beneficiary for the loss of the use of
such
delinquent payment, and such amount shall be secured by this Deed of Trust
and
the other Loan Documents.
26. Right
to Cure Defaults
Upon
the
occurrence of any Event of Default or if Grantor fails to make any payment
or to
do any act as herein provided, Beneficiary may, but without any obligation
to do
so and without notice to or demand on Grantor and without releasing Grantor
from
any obligation hereunder, take such action as Beneficiary may deem necessary
to
protect its security for the Loan. Beneficiary is authorized to enter upon
the
Property for such purposes or to appear in, defend, or bring any action or
proceeding to protect its interest in the Property or to foreclose this Deed
of
Trust or collect the Debt, and the cost and expense thereof (including
Beneficiary's attorneys' fees to the extent permitted by law), with interest
at
the Default Rate for the period after notice from Beneficiary that such cost
or
expense was incurred to the date of payment to Beneficiary, shall constitute
a
portion of the Debt, shall be secured by this Deed of Trust and the other Loan
Documents and shall be due and payable to Beneficiary upon demand.
27. Remedies
(a) Upon
the
occurrence of any Event of Default or if Grantor fails to make any payment
or to
do any action as herein provided, Beneficiary may take such action without
any
obligation to do so and notice or demand, except for any notice which may not
be
waived pursuant to applicable law or which is expressly provided for herein,
and
without releasing Grantor from any obligation hereunder, as Beneficiary deems
advisable to protect and enforce its rights against Grantor in and to the
Property including, without limitation, the following actions, each of which
may
be pursued concurrently or otherwise, at such time and in such order as
Beneficiary may determine, in its sole discretion, without impairing or
otherwise affecting the other rights and remedies of Beneficiary:
|
(i)
|
declare
the entire Debt to be immediately due and
payable;
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(ii) institute
judicial proceedings or nonjudicial proceedings, by notice and advertisement
to
the extent required by law, for the complete foreclosure of this Deed of Trust
in which case the Property or any interest therein may be sold for cash,
upon credit or otherwise in one or more parcels or in several interests or
portions and in any order or manner;
(iii) sell
in
accordance with applicable statutes, for cash, upon credit or otherwise the
Property or any part thereof and all estate, claim, demand, right, title and
interest of Grantor therein, pursuant to the power of sale contained herein
or
otherwise, at one or more sales, as an entity or in parcels, at such time and
place, upon such terms and after such notice thereof as may be required or
permitted by law;
(iv) institute
an action, suit or proceeding in equity for the specific performance of any
covenant, condition or agreement contained herein, in the Note or in the other
Loan Documents;
(v) subject
to any limitation imposed by applicable statutes, recover judgment on the Note
either before, during or after any proceedings for the enforcement of this
Deed
of Trust or the other Loan Documents;
(vi) apply
for
the appointment of a trustee, receiver, liquidator or conservator of the
Property, without notice and without regard for the adequacy of the security
for
the Debt and without regard for the solvency of Grantor, Guarantor or of any
person, firm or other entity liable for the payment of the Debt;
(vii) revoke
the license granted to Grantor to collect the Rents and other sums due under
the
leases and enforce Beneficiary's interest in the leases and Rents and enter
into
or upon the Property, either personally or by its agents, nominees or attorneys
and dispossess Grantor and its agents and servants therefrom, and thereupon
Beneficiary may to the maximum extent permitted, or not restricted, under
applicable law: (A) use, operate, manage, control, insure, maintain, repair,
restore and otherwise deal with all and every part of the Property and conduct
the business thereat; (B) complete any construction on the Property in such
manner and form as Beneficiary deems advisable; (C) make alterations, additions,
renewals, replacements and improvements to or on the Property; (D) exercise
all
rights and powers of Grantor with respect to the Property, whether in the name
of Grantor or otherwise including, without limitation, the right to make,
cancel, enforce or modify leases, obtain and evict tenants, and demand, sue
for,
collect and receive
all Rents, earnings, revenues, and other income of the Property and every part
thereof; and (E) apply the receipts from the Property to the payment of the
Debt, after deducting therefrom all expenses (including Beneficiary's attorneys'
fees) incurred in connection with the aforesaid operations and all amounts
necessary to pay the taxes, assessments insurance and other charges in
connection with the Property, as well as just and reasonable compensation for
the services of Beneficiary or its counsel, agents and employees; and (F)
exercise all other rights and remedies available to Beneficiary;
(viii) pursue
such other rights and remedies as may be available at law or in equity or under
the Uniform Commercial Code, including the right to establish a lock box for
all
Rents and other receivables of Grantor relating to the Property;
and
(ix) exercise
any and all rights afforded to Beneficiary under the Operating Lease Estoppel,
including, without limitation, the right to cause Tenant to pay an and all
sums
due and owing to Grantor directly to Beneficiary.
In
the
event of a sale, by foreclosure or otherwise, of less than all of the Property,
this Deed of Trust shall continue as a lien on the remaining portion of the
Property, except as otherwise provided by any applicable provision of
law.
(b) The
proceeds of any sale made under or by virtue of this Section, together with
any
other sums which then may be held by Beneficiary under this Deed of Trust or
the
other Loan Documents, whether under the provisions of this Section or otherwise,
shall be applied by Beneficiary to the payment of the Debt in such priority
and
proportion as required by applicable law, otherwise by Beneficiary in its sole
discretion shall deem proper.
(c) Except
as
otherwise provided by any applicable provision of law, Beneficiary may adjourn
from time to time any sale by it to be made under or by virtue of this Deed
of
Trust by announcement at the time and place appointed for such sale or for
such
adjourned sale or sales or as otherwise required by applicable statute; and,
Beneficiary, without further notice or publication, may make such sale at the
time and place to which such sale shall be so adjourned.
(d) Upon
the
completion of any sale or sales pursuant hereto, other than pursuant to the
power of sale provided for herein, an officer of any court empowered to do
so,
shall execute and deliver to the accepted purchaser or purchasers a good and
sufficient instrument, or good and sufficient instruments, conveying, assigning
and transferring all estate, right, title and interest in and to the property
and rights sold. Beneficiary is hereby irrevocably appointed the true and lawful
attorney-in-fact of Grantor, to act in its name and stead (such power of
attorney being coupled with an interest, and irrevocable), to make all necessary
conveyances (other than deeds of real property upon foreclosure), assignments,
transfers and deliveries of the Property and rights so sold and for that purpose
Beneficiary may execute all necessary instruments of conveyance, assignment
and
transfer, and may substitute one or more persons with like power, Grantor hereby
ratifying and confirming all that its attorney or such substitute or substitutes
shall lawfully do by virtue hereof. Any sale or sales made under or by virtue
of
this Section, whether made under the power of sale herein granted or under
or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, shall operate to divest all the estate, right, title, interest, claim
and
demand whatsoever, whether at law or in equity, of Grantor in and to the
properties and rights so sold, and, upon expiration of the applicable redemption
period, shall be a perpetual bar both at law and in equity against Grantor
and
against any and all persons claiming or who
may
claim the same, or any part thereof from, through or under Grantor.
(e) Upon
any
sale made under or by virtue of this Section, whether made under the power
of
sale herein granted or under or by virtue of judicial proceedings or of a
judgment or decree of foreclosure and sale, Beneficiary may bid for and acquire
the Property or any part thereof and in lieu of paying cash therefor may make
a
settlement for the purchase price by crediting upon the Debt the net sales
price
after deducting therefrom the expenses of the sale and costs of the action
and
any other sums which Beneficiary is authorized to deduct under this Deed of
Trust, in accordance with applicable statutes.
(f) No
recovery of any judgment by Xxxxxxxxxxx and no levy of an execution under any
judgment upon the Property or upon any other property of Grantor shall affect
in
any manner or to any extent the lien of this Deed of Trust upon the Property
or
any part thereof, or any liens, rights, powers or remedies of Beneficiary
hereunder, but such liens, rights, powers and remedies of Beneficiary shall
continue unimpaired as before.
(g) Beneficiary
may terminate or rescind any proceeding or other action brought in connection
with its exercise of the remedies provided in this Section at any time before
the conclusion thereof, as determined in Beneficiary's sole discretion and
without prejudice to Beneficiary.
(h) Beneficiary
may resort to any remedies and the security given by the Note, this Deed of
Trust or the other Loan Documents in whole or in part, and in such portions
and
in such order as determined by Beneficiary's sole discretion. No such action
shall in any way be considered a waiver of any rights, benefits or remedies
evidenced or provided by the Note, this Deed of Trust or the other Loan
Documents. The failure of Beneficiary to exercise any right, remedy or option
provided in the Note, this Deed of Trust or the other Loan Documents shall
not
be deemed a waiver of such right, remedy or option or of any covenant or
obligation secured by the Note, this Deed of Trust or the other Loan Documents.
No acceptance by Beneficiary of any payment after the occurrence of any Event
of
Default and no payment by Beneficiary of any obligation for which Grantor is
liable hereunder shall be deemed to waive or cure any Event of Default with
respect to Grantor, or Xxxxxxx's liability to pay such obligation. No sale
of
all or any portion of the Property, no forbearance on the part of Beneficiary,
and no extension of time for the payment of the whole or any portion of the
Debt
or any other indulgence given by Beneficiary to Grantor, shall operate to
release or in any manner affect the interest of Beneficiary in the remaining
Property or the liability of Grantor to pay the Debt. No waiver by Beneficiary
shall be effective unless it is in writing and then only to the extent
specifically stated.
(i) The
interests and rights of Beneficiary under the Note, this Deed of Trust or the
other Loan Documents shall not be impaired by any indulgence, including: (i)
any
renewal, extension or modification which Beneficiary may grant with respect
to
any of the Debt; (ii) any surrender, compromise, release, renewal, extension,
exchange or substitution which Beneficiary may grant with respect to the
Property or any portion thereof; or (iii) any release or indulgence granted
to
any maker, endorser, guarantor or surety of any of the Debt.
(j) Grantor
hereby expressly waives and releases to the fullest extent permitted by law,
the
pleading of any statute of limitations as a defense to payment of the Debt
or
performance of its obligations under any of the Loan Documents.
28. Right
of Entry
Beneficiary
and its agents shall have the right to enter and inspect the Property during
normal business hours upon reasonable notice.
29. Security
Agreement
This
Deed
of Trust is a "security agreement" within the meaning of the Uniform Commercial
Code. The Property includes both real and personal property and all other rights
and interests, whether tangible or intangible in nature, of Grantor in the
Property. By executing and delivering this Deed of Trust, Grantor has granted
and hereby grants to Beneficiary, as security for the Debt, a security interest
in the Property to the full extent that the Property may be subject to the
Uniform Commercial Code (such portion of the Property so subject to the Uniform
Commercial Code being called in this Section the "Collateral").
Grantor represents, warrants and covenants that it has not previously granted,
and it shall not in the future grant, any security interests under Article
9 of
the Uniform Commercial Code in any of the Collateral. Xxxxxxx hereby agrees
with
Beneficiary to execute and deliver to Beneficiary, in form and substance
satisfactory to Beneficiary, such financing statements and such further
assurances as Beneficiary may from time to time reasonably consider necessary
to
create, perfect or preserve Beneficiary's security interest herein granted.
This
Deed of Trust shall also be effective as a financing statement covering any
other property and may be filed in any other appropriate filing or recording
office. This Deed of Trust shall also constitute a "fixture filing" for the
purposes of the Uniform Commercial Code. All or part of the Property are or
are
to become
fixtures. If an Event of Default shall occur, Beneficiary, in addition to any
other rights and remedies which it may have, shall have and may exercise
immediately and without demand, any and all rights and remedies granted to
a
secured party upon default under the Uniform Commercial Code including, without
limitation, the right to take possession of the Collateral or any part thereof,
and to take such other measures as Beneficiary may deem necessary for the care,
protection and preservation of the Collateral. Upon request or demand of
Beneficiary, Grantor shall at its expense assemble the Collateral and make
it
available to Beneficiary at the Land. Grantor shall pay to Beneficiary on demand
any and all expenses, including Beneficiary's attorneys' fees, incurred or
paid
by Beneficiary in protecting the interest in the Collateral and in enforcing
the
rights hereunder with respect to the Collateral. Any notice of sale, disposition
or other intended action by Beneficiary with respect to the Collateral sent
to
Grantor in accordance with the provisions hereof at least ten (10) days prior
to
such action, shall constitute commercially reasonable notice to Grantor. The
proceeds of any disposition of the Collateral, or any part thereof, may be
applied by Beneficiary to the payment of the Debt in such priority and
proportions as Beneficiary in its discretion shall deem proper. In the event
of
any change in name, identity or structure of any Grantor, such Grantor shall
notify Beneficiary thereof and promptly after request shall execute, file and
record such Uniform Commercial Code forms as are necessary to maintain the
priority of Beneficiary's lien upon and security interest in the Collateral,
and
shall pay all expenses and fees in connection with the filing and recording
thereof. If Beneficiary shall require the filing or recording of additional
Uniform Commercial Code forms or continuation statements, Grantor shall,
promptly after request, execute, file and record such Uniform Commercial Code
forms or continuation statements as Beneficiary shall deem necessary, and shall
pay all expenses and fees in connection with the filing and recording thereof,
it being understood and agreed, however, that no such additional documents
shall
increase Grantor's obligations under the Note, this Deed of Trust and the other
Loan Documents. Grantor hereby irrevocably appoints Beneficiary as its
attorney-in-fact, coupled with an interest,
to file with the appropriate public office on its behalf
any financing or other statements signed only by Beneficiary, as secured party,
in connection with the Collateral covered by this Deed of Trust.
30. Actions
and Proceedings
Beneficiary
has the right to appear in and defend any action or proceeding brought with
respect to the Property and to bring any action or proceeding, in the name
and
on behalf of Grantor, which Beneficiary, in its discretion, decides should
be
brought to protect its interest in the Property. Beneficiary shall, at its
option, be subrogated to the lien of any mortgage or other security instrument
discharged in whole or in part by the Debt, and any such subrogation rights
shall constitute additional security for the payment of the Debt.
31. Waiver
of Setoff and Counterclaim
All
amounts due under this Deed of Trust, the Note and the other Loan Documents
shall be payable without setoff, counterclaim or any deduction whatsoever.
Grantor hereby waives the right to assert a counterclaim (other than compulsory
counterclaims) in any action or proceeding brought against it by Beneficiary,
or
arising out of or in any way connected with this Deed of Trust, the Note, any
of
the other Loan Documents, or the Debt.
32. Contest
of Certain Claims
Notwithstanding
the provisions of Sections 5 and 24(c) and (j) hereof, Grantor shall not be
in
default for failure to pay or discharge Taxes, Other Charges or a mechanic's
or
materialman's lien asserted against the Property if, and so long as: (a) Grantor
shall have notified Beneficiary of such nonpayment and the reasons therefor
within ten (10) days of obtaining knowledge thereof; (b) Grantor shall
diligently and in good faith contest such Taxes, Other Charges or lien by
appropriate legal proceedings which shall operate to prevent the enforcement
or
collection thereof and the sale of the Property or any part thereof, in
satisfaction thereof; (c) if requested by Beneficiary because such contest
reasonably could impair Beneficiary's collateral, then Grantor shall have
furnished to Beneficiary affirmative title coverage satisfactory to Beneficiary,
a cash deposit, or an indemnity bond satisfactory to Beneficiary with a surety
satisfactory to Beneficiary, in the amount of the Taxes, other Charges or
mechanic's or materialman's lien claim, plus a reasonable additional sum to
pay
all costs, interest and penalties that may be imposed or incurred in connection
therewith, to assure payment of the matters under contest and to prevent any
sale or forfeiture of the Property or any part thereof; (d) Grantor shall
promptly upon final determination thereof pay the amount of any such Taxes,
Other Charges or claim so determined, together with all costs, interest and
penalties which may be
payable in connection therewith; and (e) the failure to pay the Taxes, Other
Charges or mechanic's or materialman's lien claim does not constitute a default
under any other deed of trust, mortgage or security interest covering or
affecting any part of the Property. Notwithstanding the foregoing, Grantor
shall
immediately upon request of Beneficiary pay (and if Grantor shall fail so to
do,
Beneficiary may, but shall not be required to, pay or cause to be discharged
or
bonded against) any such Taxes, Other Charges or claim notwithstanding
such contest, if in the reasonable
opinion of Beneficiary, the Property or any part thereof or interest therein
may
be in danger of being sold, forfeited, foreclosed, terminated, canceled or
lost.
Beneficiary may pay over any such cash deposit or part thereof to the claimant
entitled thereto at any time when, in the judgment of Beneficiary, the
entitlement of such claimant is established.
33. Recovery
of Sums Required to Be Paid
Beneficiary
shall have the right from time to time to take action to recover any sum or
sums
which constitute a part of the Debt as they become due, without regard to
whether or not the balance of the Debt shall be due, and without prejudice
to
the right of Beneficiary thereafter to bring an action of foreclosure, or any
other action, for a default or defaults by Grantor existing at the time such
earlier action was commenced.
34. Marshaling
and Other Matters
Grantor
hereby waives, to the extent permitted by law, the benefit of all appraisement,
valuation, stay, extension, reinstatement laws now or hereafter in force, and
all rights of marshaling in the event of any sale hereunder of the Property
or
any part thereof or any interest therein.
35. Hazardous
Substances
Grantor
hereby represents and warrants to Beneficiary that, to the best of Grantor's
knowledge, after due inquiry and investigation, except as set forth in the
Phase
I Environmental Site Assessment (EBI Project #11063582) dated August 4, 2006
prepared by EBI Consulting (the "Phase I"): (a) the Property is not in direct
or
indirect violation of any local, state, federal or other governmental authority,
statute, ordinance, code, order, decree, law, rule or regulation or common
law
pertaining to or imposing liability or standards of conduct concerning the
protection of human health, environmental regulation, contamination or clean-up
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, the Resource Conservation and
Recovery Act, as amended, and any state super-lien and environmental clean-up
statutes (collectively, "Environmental
Laws");
(b)
the Property is not subject to any
private or governmental lien or judicial or administrative notice or action
relating to hazardous and/or toxic, dangerous and/or regulated substances,
Toxic
Mold, solvents, wastes, materials, pollutants or contaminants, petroleum,
tremolite, anthlophylie or actinolite or polychlorinated biphenyls (including,
without limitation, any raw materials which include hazardous constituents)
and
any other substances, materials or solvents which are included under or
regulated by Environmental Laws, including, without limitation, Asbestos
(collectively, "Hazardous
Substances");
(c)
no Hazardous Substances are or have been, prior to Grantor's acquisition of
the
Property, discharged, generated, treated, disposed of or stored on, incorporated
in or removed or transported from the Property other than in compliance with
all
Environmental Laws; and (d) no underground storage tanks exist on any of the
Property. So long as Grantor owns or is in possession of the
Property, Grantor
shall keep or cause the Property to be kept free from Hazardous Substances
(other than
de
minimis
quantities of Hazardous Substances that are necessary and lawfully used in
the
operation of the Property as a hotel or motel and which are stored and disposed
of in compliance with all Environmental Laws) and in compliance with all
Environmental Laws, shall promptly notify Beneficiary if Grantor shall become
aware of any Hazardous Substances on the Property and/or if Grantor shall become
aware that the Property is in direct or indirect violation of any Environmental
Laws and Grantor shall remove such Hazardous Substances and/or cure such
violations, as applicable, as required by law, promptly after Grantor becomes
aware of such Hazardous Substances or such violations, at Grantor's sole
expense. Nothing herein shall prevent Grantor from recovering such expenses
from
any other party that may be liable for such removal or cure. Upon Beneficiary's
request, at any time and from time to time while this Deed of Trust is in effect
(but in no event more frequently than when specific facts and circumstances
reasonably dictate, or otherwise at Beneficiary's election but at Beneficiary's
expense), Grantor shall provide at Grantor's sole expense, an inspection or
audit of the Property prepared by a licensed hydrogeologist or licensed
environmental engineer approved by Beneficiary indicating the presence or
absence of Hazardous Substances on the Property. If Grantor fails to provide
such inspection or audit within thirty (30) days after such request, Beneficiary
may order such inspection or audit, and Grantor hereby grants to Beneficiary
and
its employees and agents access to the Property and a license to undertake
such
inspection or audit. The cost of such inspection or audit shall be paid by
Grantor and added to the principal balance of the sums due under the Note and
this Deed of Trust and shall bear interest thereafter until paid at the Default
Rate. The obligations and liabilities of Grantor under this Section shall
survive any termination, satisfaction, or assignment of this Deed of Trust
and
the exercise by Beneficiary of any of its rights or remedies thereunder
including, without limitation, the acquisition of the Property by foreclosure
or
a conveyance in lieu of foreclosure for acts or events occurring or obligations
arising prior to foreclosure or other transfer of title from
Grantor.
36. Asbestos
(a) Grantor
represents and warrants that, except as set forth in the Phase I, after due
inquiry and investigation, no asbestos or any substance containing asbestos
(collectively, "Asbestos")
is
located on the Property. Grantor shall not install in the Property, nor permit
to be installed in the Property, Asbestos, and shall remove, encapsulate or
adopt an O&M Plan (as defined below) in accordance with applicable law and
with regard to any Asbestos promptly upon discovery to the satisfaction of
Beneficiary, at Grantor's sole expense. Upon Beneficiary's reasonable request,
upon Beneficiary's reason to believe asbestos is present at the Property or
upon
an Event of Default, Grantor shall provide, at Grantor's sole expense, an
inspection or audit of the Property prepared by an engineering or consulting
firm approved by Beneficiary, indicating the presence or absence of Asbestos
on
the Property. If Grantor fails to provide such inspection or audit within thirty
(30) days after such request, Beneficiary may order such inspection or audit.
The cost of such inspection or audit shall be paid by Grantor and added to
the
principal balance
of the sums due under the Note and this Deed of Trust, and shall bear interest
thereafter until paid at the Default Rate. The obligations and liabilities
of
Grantor under this Section shall survive any termination, satisfaction, or
assignment of this Deed of Trust and the exercise by Beneficiary of any of
its
rights or remedies thereunder, including,
but not limited to, the
acquisition of the Property by foreclosure or a conveyance in lieu of
foreclosure for acts or events occurring or obligations arising prior to or
upon
the date of this Deed of Trust, whether or not such acts, events or obligations
are, as of the date of this Deed of Trust, known or ascertainable.
(b) Grantor
shall, subject to Beneficiary's reasonable approval, develop an operations
and
maintenance plan for the Property with respect to the presence of Asbestos
in
the Improvements (the "O&M
Plan").
Grantor shall comply in all respects with the terms and conditions of the
O&M Plan. Unless required by Environmental Laws, Grantor shall not modify or
amend the O&M Plan without Beneficiary's prior written consent, not to be
unreasonably withheld, conditioned or delayed.
(c) Grantor
shall not remove, disturb, encapsulate or otherwise remediate the Asbestos
in
the Improvements except in compliance with the O&M Plan and all
Environmental Laws. If Grantor makes any alterations or modifications to the
Improvements that would disturb or expose any Asbestos in the Improvements
or
cause any of such Asbestos to become friable, Grantor shall remove or
encapsulate such Asbestos in compliance with all applicable Environmental Laws
before allowing occupancy of such space or opening such space to the
public.
37. Environmental
Monitoring
Grantor
shall give prompt written notice to Beneficiary of: (a) any proceeding or
inquiry by any party with respect to the presence of any Hazardous Substance
on,
under, from or about the Property; (b) all claims made or threatened by any
third party against Grantor or the Property relating to any loss or injury
resulting from any Hazardous Substance; and (c) Grantor's discovery of any
occurrence or condition on any real property adjoining or in the vicinity of
the
Property that could cause the Property to be subject to any investigation or
cleanup pursuant to any Environmental Law. Grantor shall permit Beneficiary
to
join and participate, as a party if it so elects, in any legal proceedings
or
actions initiated with respect to the Property in connection with any
Environmental Law or Hazardous Substance, and Grantor shall pay all attorneys'
fees incurred by Beneficiary in connection therewith. In the event that any
environmental site assessment report prepared for the Property recommends that
an operations and maintenance plan be implemented for Asbestos or any Hazardous
Substance, Grantor shall cause such operations and maintenance plan to be
prepared and implemented at Grantor's expense upon request of Beneficiary and
in
accordance with the recommendation. In the event that any inspection,
assessment, investigation, site monitoring, containment, cleanup, removal,
restoration, corrective action or other work of any kind to prevent, cure or
mitigate any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including, without limitation, the movement of Hazardous
Substances through ambient air, soil, surface water, ground water, wetlands,
land or subsurface strata, or which is reasonably necessary or desirable under
an applicable Environmental Law ("Remedial
Work")
is
recommended, Grantor shall, at its sole cost and expense, commence and
thereafter diligently prosecute to completion all such Remedial Work within
thirty (30) days after written demand by Beneficiary
for performance thereof (or such shorter period of time as may be required
under
applicable law).
38. Management
of the Property
Grantor
further covenants and agrees with Beneficiary as follows, all to the extent
Grantor has the ability, under the Operating Lease, other contract or otherwise,
to control, direct or affect any of the following:
(a) Grantor
shall cause the hotel located on the Property to be operated pursuant to the
Management Agreement and the Franchise Agreement.
(b) Grantor
shall:
(i) cause
all
sums required to be paid by Tenant under the Management Agreement and the
Franchise Agreement to be paid and Xxxxxx's performance and observance of all
of
the material covenants and agreements required to be performed and observed
by
it under the Management Agreement and the Franchise Agreement;
(ii) promptly
notify Beneficiary in writing of any default under the Management Agreement
or
Franchise Agreement of which it is aware and provide Beneficiary with copies
of
any notices delivered by Grantor in connection therewith;
(iii) promptly
deliver to Beneficiary a copy of each financial statement, business plan,
capital expenditures plan, notice, report and estimate received by it under
the
Management Agreement or the Franchise Agreement;
(iv) cause
Tenant to promptly enforce the performance and observance of all of the material
covenants and agreements required to be performed and/or observed by Manager
under the Management Agreement and Franchisor under the Franchise
Agreement;
(v) assign
to
Beneficiary any right it may have to modify the Management Agreement or the
Franchise Agreement;
(vi) grant
Beneficiary the right, but Beneficiary shall be under no obligation, to pay
any
sums and to perform any act or take any action as may be appropriate to cause
all the terms, covenants and conditions of the Franchise Agreement or Management
Agreement on the part of Grantor to be performed or observed to be promptly
performed or observed on behalf of Grantor, to the end that the rights of
Grantor in, to and under the Franchise Agreement or Management Agreement shall
be kept unimpaired and free from default;
(vii) use
its
reasonable efforts to obtain, from time to time, from Manager or Franchisor
such
certificates of estoppel with respect to compliance by Tenant with the terms
of
the Management Agreement or Franchise Agreement, respectively, as may be
requested by Beneficiary;
(vii) exercise
each individual option, if any, or cause Tenant to exercise each individual
option, if any, to extend or renew the term of the Management Agreement or
the
Franchise Agreement upon demand by Beneficiary made at any time within one
year
of the last day upon which any such option may be exercised, and Grantor hereby
expressly authorizes and appoints Beneficiary its attorney-in-fact to exercise
any such option in the name of and upon behalf of Grantor, which power of
attorney shall be irrevocable and shall be deemed to be coupled with an
interest; provided,
however,
that so
long as no Event of Default exists hereunder or under any of the Loan Documents,
Beneficiary shall not be entitled to exercise the foregoing appointment;
and
(viii) promptly
notify Beneficiary in writing and provide Beneficiary with copies of any
material notices delivered to Grantor or of which Grantor becomes aware,
including, without limitation, any notice of violation of any laws, regulations,
or ordinances or other notice from any governmental or quasi-governmental
authority, or any notice of default under the Leases, the Management Agreement
or the Franchise Agreement or any other document or agreement relating to the
Property, which contain information that, if true, might materially adversely
affect the value, use or operation of the Property.
(c) Grantor
shall not or permit Tenant to, without Beneficiary's prior written consent:
(i)
surrender, terminate or cancel the Management Agreement or the Franchise
Agreement; (ii) reduce or consent to the reduction of the term of the Management
Agreement or the Franchise Agreement; (iii) increase or consent to the increase
of the amount of any charges under the Management Agreement or the Franchise
Agreement; (iv) otherwise modify, change, supplement, alter or amend, or waive
or release any of its rights and remedies under the Management Agreement or
the
Franchise Agreement in any material respect; or (v) operate
the Property under the name of any hotel chain or system other than the Hampton
Inn brand.
(d) Grantor
shall not, without Beneficiary's prior written consent, not to be unreasonably
withheld, conditioned or delayed, enter into transactions with any affiliate
including, without limitation, any arrangement providing for the management
of
the hotel on the Property, the rendering or receipt of services or the purchase
or sale of inventory, except any such transaction in the ordinary course of
business of Grantor if the monetary or business consideration arising therefrom
would be substantially as advantageous to Grantor as the monetary or business
consideration which Beneficiary would obtain in a comparable transaction with
a
person not an affiliate of Grantor, it being understood and acknowledged by
Beneficiary that the Operating Lease and the Management Agreement, as they
currently exist, have been and is consented to and approved by
Beneficiary.
(e) Grantor
irrevocably authorizes and directs Manager to deliver to Beneficiary: (i) all
operating information concerning the Property submitted by Tenant to Manager;
(ii) the written results of all quality assurance inspections of the Property
performed by Manager; and (iii) such other information in the possession of
Manager, that Beneficiary or Beneficiary's agents may reasonably request, from
time to time regarding management or operation of the Property not included
in
the reports referred to above.
(f) To
the
extent commercially reasonable, Grantor shall, or shall cause Tenant to, observe
and perform each and every term to be observed or performed by Grantor or Tenant
pursuant to the terms of any and all other material agreements to which Grantor
now is or hereafter becomes a party involving, relating to or otherwise
concerning the sale of food and beverages (including, without limitation,
alcoholic beverages) at the Property. Additionally, Grantor shall or shall
cause
Tenant to:
(i) diligently
proceed to cure any default by Grantor or Tenant under any such agreement,
subject to any rights of contest;
(ii)
promptly
notify Beneficiary in writing of any default of which it becomes aware under
any
such agreement and provide Beneficiary with copies of any notices of default
delivered in connection therewith;
(iii) promptly
enforce, to the extent commercially reasonable, the performance and observance
of all of the covenants and agreements required to be performed and/or observed
by any other party under any such agreements; and
(iv) subject
to any rights of contest, grant Beneficiary the right (but Beneficiary shall
be
under no obligation), upon failure of Grantor or Tenant to do so, to pay any
sums and to perform any act or take any action as may be necessary to cause
all
the terms, covenants and conditions of any such agreement on the part of Grantor
or Tenant to be performed or observed to be promptly performed or observed
on
behalf of Grantor, to the end that the rights of
Grantor or Tenant in, to and under any such agreement shall be kept unimpaired
and free from default.
39. Handicapped
Access
(a) Grantor
agrees that the Property shall at all times strictly comply to the extent
applicable with the requirements of the Americans with Disabilities Act of
1990,
all state and local laws and ordinances related to handicapped access and all
rules, regulations, and orders issued pursuant thereto including, without
limitation, the Americans with Disabilities Act Accessibility Guidelines for
Buildings and Facilities (collectively, "Access
Laws").
(b) Notwithstanding
any provisions set forth herein or in any other document regarding Beneficiary's
approval of alterations of the Property, Grantor shall not alter the Property
in
any manner which would increase Grantor's responsibilities for compliance with
the applicable Access Laws without the prior written approval of Beneficiary.
The foregoing shall apply to tenant improvements constructed by Grantor or
by
any of its tenants. Beneficiary may condition any such approval upon receipt
of
a certificate of Access Law compliance from an architect, engineer or other
person acceptable to Beneficiary.
(c) Xxxxxxx
agrees to give prompt written notice to Beneficiary of the receipt by Grantor
of
any complaints related to violation of any Access Laws and of the commencement
of any proceedings or investigations which relate to compliance with applicable
Access Laws.
40. ERISA
(a) Grantor
covenants and agrees that it shall not engage in any transaction which would
cause any obligation, or action taken or to be taken, hereunder (or the exercise
by Beneficiary of any of its rights under the Note, this Deed of Trust, and
the
other Loan Documents) to be a non-exempt (under a statutory or administrative
class exemption) prohibited transaction under the Employee Retirement Income
Security Act of 1974 (or any successor legislation thereto), as amended
("ERISA").
(b) Grantor
further covenants and agrees to deliver to Beneficiary such certifications
or
other evidence from time to time throughout the term of this Deed of Trust,
as
requested by Beneficiary in its sole discretion, that: (i) Grantor is not an
"employee benefit plan" as defined in Section 3(3) of ERISA, which is subject
to
Title I of ERISA, or a "governmental plan" within the meaning of Section 3(32)
of ERISA; (ii) Grantor is not subject to state statutes regulating investments
and fiduciary obligations with respect to governmental plans; and (iii) one
or
more of the following circumstances is true:
(A) Equity
interests in Grantor are publicly offered securities, within the meaning of
29
C.F.R. 2510.3-101 (b)(2);
(B) Less
than
twenty-five percent (25%) of each outstanding class of equity interests in
Grantor are held by "benefit plan investors" within the meaning of 29 C.F.R.
2510.3-l O l(f)(2); or
(C) Grantor
qualifies as an "operating company" or a "real estate operating company" within
the meaning of 29 C.F.R. 2510.3-101(c) or (e) or an investment company
registered under The Investment Company Act of 1940.
41. Indemnification
IN
ADDITION TO ANY OTHER INDEMNIFICATIONS PROVIDED HEREIN, IN THE LEASE ASSIGNMENT,
THE ENVIRONMENTAL AGREEMENT OR IN THE OTHER LOAN DOCUMENTS, GRANTOR AND
GUARANTOR SHALL PROTECT, DEFEND, INDEMNIFY AND SAVE HARMLESS BENEFICIARY FROM
AND AGAINST ALL LIABILITIES, OBLIGATIONS, CLAIMS, DEMANDS, DAMAGES, PENALTIES,
CAUSES OF ACTION, LOSSES, FINES, COSTS AND EXPENSES (INCLUDING, WITHOUT
LIMITATION, OUT-OF-POCKET ATTORNEYS' FEES AND EXPENSES), IMPOSED UPON OR
INCURRED BY OR ASSERTED AGAINST BENEFICIARY (EXCEPT DUE TO BENEFICIARY'S GROSS
NEGLIGENCE OR INTENTIONAL MISCONDUCT) BY REASON OF: (A) OWNERSHIP OF THIS DEED
OF TRUST, THE PROPERTY OR ANY INTEREST THEREIN OR RECEIPT OF ANY RENTS; (B)
ANY
ACCIDENT, INJURY TO OR DEATH OF PERSONS OR LOSS OF OR DAMAGE TO PROPERTY
OCCURRING IN, ON OR ABOUT THE PROPERTY OR ANY PART THEREOF OR ON THE ADJOINING
SIDEWALKS, CURBS, ADJACENT PROPERTY OR ADJACENT PARKING AREAS, STREETS OR WAYS;
(C) ANY USE, NONUSE OR CONDITION IN, ON OR ABOUT THE PROPERTY OR ANY PART
THEREOF OR ON ADJOINING SIDEWALKS, CURBS, ADJACENT PROPERTY OR ADJACENT PARKING
AREAS, STREETS OR WAYS; (D) ANY FAILURE ON THE PART OF GRANTOR OR GUARANTOR
TO
PERFORM OR COMPLY WITH ANY OF THE TERMS OF THIS DEED OF TRUST; (E) PERFORMANCE
OF ANY LABOR OR SERVICES OR THE FURNISHING OF ANY MATERIALS OR OTHER PROPERTY
IN
RESPECT OF THE PROPERTY OR ANY PART THEREOF; (F) THE PRESENCE, DISPOSAL, ESCAPE,
SEEPAGE, LEAKAGE, SPILLAGE, DISCHARGE, EMISSION, RELEASE, OR THREATENED RELEASE
OF ANY HAZARDOUS SUBSTANCE OR ASBESTOS ON, FROM, OR AFFECTING THE PROPERTY
OR
ANY OTHER PROPERTY; (G) ANY PERSONAL INJURY (INCLUDING WRONGFUL DEATH) OR
PROPERTY DAMAGE (REAL OR PERSONAL) ARISING OUT OF OR RELATED TO SUCH HAZARDOUS
SUBSTANCE OR ASBESTOS; (H) ANY LAWSUIT BROUGHT OR THREATENED, SETTLEMENT
REACHED, OR GOVERNMENT ORDER RELATING TO SUCH HAZARDOUS SUBSTANCE OR ASBESTOS;
(I) ANY VIOLATION OF THE ENVIRONMENTAL LAWS, WHICH ARE BASED UPON OR IN ANY
WAY
RELATED TO SUCH HAZARDOUS SUBSTANCE OR ASBESTOS INCLUDING, WITHOUT LIMITATION,
THE COSTS AND EXPENSES OF ANY REMEDIAL ACTION, OUT-OF-POCKET ATTORNEYS’ AND
CONSULTANTS’ FEES, INVESTIGATION AND LABORATORY FEES, COURT COSTS, AND
LITIGATION EXPENSES; (J) ANY FAILURE OF THE PROPERTY TO COMPLY WITH ANY ACCESS
LAWS; (K) ANY REPRESENTATION OR WARRANTY MADE IN THE NOTE, THIS DEED OF TRUST
OR
THE OTHER LOAN DOCUMENTS BEING FALSE OR MISLEADING IN ANY RESPECT AS OF THE
DATE
SUCH REPRESENTATION OR WARRANTY WAS MADE; (L) ANY CLAIM BY BROKERS, FINDERS
OR
SIMILAR PERSONS CLAIMING TO BE ENTITLED TO A COMMISSION IN CONNECTION WITH
ANY
LEASE OR OTHER TRANSACTION INVOLVING THE PROPERTY OR ANY PART THEREOF UNDER
ANY
LEGAL REQUIREMENT OR ANY LIABILITY ASSERTED AGAINST BENEFICIARY WITH RESPECT
THERETO; (M) THE CLAIMS OF ANY TENANT OR ANY OTHER LESSEE OF ALL OR ANY PORTION
OF THE PROPERTY OR ANY PERSON ACTING THROUGH OR UNDER ANY LESSEE OR OTHERWISE
ARISING UNDER OR AS A CONSEQUENCE OF ANY LEASE; AND (N) CLAIMS OF ANY PERSONS
ARISING UNDER OR AS A CONSEQUENCE OF THE OPERATING AGREEMENTS. ANY AMOUNTS
PAYABLE TO BENEFICIARY BY REASON OF THE APPLICATION OF THIS SECTION SHALL BE
IMMEDIATELY DUE AND PAYABLE, SHALL BE SECURED BY THIS DEED OF TRUST AND SHALL
BEAR INTEREST AT THE DEFAULT RATE FROM THE DATE LOSS OR DAMAGE IS SUSTAINED
BY
BENEFICIARY UNTIL PAID. THE OBLIGATIONS AND LIABILITIES OF GRANTOR AND GUARANTOR
UNDER THIS SECTION SHALL SURVIVE ANY TERMINATION, SATISFACTION OR ASSIGNMENT
OF
THIS DEED OF TRUST OR THE ENTRY OF A JUDGMENT OF FORECLOSURE, SALE OF THE
PROPERTY BY NONJUDICIAL FORECLOSURE SALE, OR DELIVERY OF A CONVEYANCE IN LIEU
OF
FORECLOSURE, BUT SHALL CONTINUE TO BE SUBJECT TO THE LIMITATIONS ON RECOURSE
SET
FORTH IN SECTION 42 BELOW, TO THE EXTENT APPLICABLE, WHICH SHALL ALSO
SURVIVE.
42. Recourse
and Indemnification
(a) Subject
to the qualifications and exceptions set forth in Section 8 of the Note and
the
qualifications and exceptions set forth in the Guaranty, neither Grantor nor
Guarantor shall be personally liable either at law or in equity for the
repayment of the Debt or the failure of performance of any other contained
in
the Deed of Trust or the other Loan Documents and Beneficiary will satisfy
any
judgments, orders or decrees on account of the failure to repay such Debt and/or
the failure to perform any such obligation, from the Property and any other
real
or personal property, tangible or intangible, as Grantor, Guarantor or any
other
entity shall have pledged or assigned to secure the Note by any of the Loan
Documents, except that Beneficiary may bring a foreclosure action, an action
for
specific performance or any other appropriate action or proceeding to enable
Beneficiary to enforce and realize upon the Note, the Deed of Trust, the other
Loan Documents, and the interests in the Property and any other collateral
given
to Beneficiary pursuant to the Deed of Trust and the other Loan Documents;
provided,
however,
that,
except as specifically provided in this Section, any judgment in any such action
or proceeding shall be enforceable against Grantor only to the extent of
Grantor's interest in the Property and in any other collateral given to
Beneficiary. Beneficiary, by accepting the Note, the Deed of Trust and the
other
Loan Documents, agrees that it shall not sue for, seek or demand any deficiency
judgment against Grantor in any such action or proceeding, under, by reason
of
or in connection with the Deed of Trust, the other Loan Documents or the Note.
The provisions of this Section shall not, however: (i) constitute a waiver,
release or impairment of any obligation evidenced or secured by the Deed of
Trust or the other Loan Documents or the Note; (ii) impair the right of
Beneficiary to name Grantor as a party defendant in any action or suit for
foreclosure and sale under the Deed of Trust; (iii) affect the validity or
enforceability of any guaranty or indemnity made in connection with the Deed
of
Trust or the other Loan Documents; (iv) impair the right of Beneficiary to
obtain the appointment of a receiver; (v) impair the right of Beneficiary to
bring suit with respect to fraud or misrepresentation by Grantor or any other
person or entity in connection with the Deed of Trust or the other Loan
Documents; (vi) affect the validity or enforceability of the Loan Documents;
or
(vii) affect the ability or right of Beneficiary to sue any Guarantor for those
matters addressed in the Guaranty and/or sue Grantor for any of those matters
addressed in Section 8 of the Note.
(b) Nothing
herein shall be deemed to be a waiver of any right which Beneficiary may have
under Section 506(a), 506(b), 1111(b) or any other provisions of the U.S.
Bankruptcy Code to file a claim for the full amount of the Debt secured by
the
Deed of Trust or to require that all collateral shall continue to secure all
of
the debt owing to Beneficiary in accordance with the Note, the Deed of Trust
and
the other Loan Documents.
43. Notice
Any
notice, demand, statement, request or consent made hereunder shall be in writing
and shall be deemed given on the next business day if sent by Federal Express
or
other reputable overnight courier and designated for next business day delivery,
or on the third (3rd) day following the day such notice is deposited with the
United States postal service first class certified mail, return receipt
requested, at the addresses set forth below, of the party to whom such notice
is
to be given, or to such other address or additional party as Grantor, Guarantor
or Beneficiary, as the case may be, shall in like manner designate in
writing:
Grantor: Company
Subsidiary, a
Tennessee
limited partnership
c/o
Equity Inns, Inc.
0000
Xxxx
Xxxxx Xxxxxxxxx
Germantown,
Tennessee 38138
Attn:
President
With
a
copy to: Equity
Inns, Inc.
0000
Xxxx
Xxxxx Xxxxxxxxx
Germantown,
Tennessee 38138
Attn:
Xxxxxxxx Xxxxxxxxx, Esq.
And
with
a copy of any
notice
of
default hereunder to: Company
Subsidiary,
a
Delaware limited liability company
c/o
Equity Inns, Inc.
0000
Xxxx
Xxxxx Xxxxxxxxx
Germantown,
Tennessee 38138
Beneficiary: Capmark
Bank
0000
Xxxxx Xxxx Center
Suite
330
Midvale,
Utah 84047
Attention:
President
Loan
No.
00-0000000
Copies
to: Capmark
Finance Inc.
000
Xxxxxx Xxxx
Horsham,
Pennsylvania 19044
Attention:
Servicing- Executive Vice President
and: Capmark
Finance Inc.
0000
Xxxxxx Xxxxxxxxx, 00xx
Xxxxx
McLean,
Virginia 22102
Fax
No.:
(000) 000-0000
Attention:
Xxxxx X. Xxxxxxxxx
Loan
No.
00-0000000
and:
Xxxxxx
Xxxxxx Xxxxxxxx LLP
0000
Xxxxxx Xxxxxxxxx Xxxxxx, X.X.
Suite
700
Washington,
D.C. 00000-0000
Fax
No.:
(000) 000-0000
Attn.:
Xxxxxxxxxxx X. Xxxx, Esq.
44. Authority
Grantor
represents and warrants that: (a) it has full power, authority and right to
execute, deliver and perform its obligations pursuant to this Deed of Trust,
give, grant, bargain, sell, alien, enfeoff, convey, confirm, mortgage, warrant,
pledge, hypothecate and assign the Property pursuant to the terms hereof and
to
keep and observe all of the terms of this Deed of Trust on Grantor's part to
be
performed; and (b) Grantor is not a "foreign person" within the meaning of
Section 1445(f)(3) of the Internal Revenue Code of 1986, as amended, and the
related Treasury Department regulations, including temporary regulations.
Beneficiary represents and warrants that it has full power, authority and right
to execute, deliver and perform its obligations pursuant to this Deed of
Trust.
45. Waiver
of Notice
Neither
Grantor nor Guarantor shall be entitled to any notices of any nature whatsoever
from Beneficiary except with respect to matters for which this Deed of Trust
specifically and expressly provides for the giving of notice by Beneficiary
to
Grantor or Guarantor and except with respect to matters for which Beneficiary
is
required by applicable law to give notice, and Grantor and Guarantor each hereby
expressly waives the right to receive any notice from Beneficiary with respect
to any matter for which this Deed of Trust does not specifically and expressly
provide for the giving of notice by Beneficiary to Grantor or Guarantor,
including, without limitation, notice of default, notice of intention to
accelerate sums under the Loan Documents and notice of acceleration of sums
under the Loan Documents. All notices required hereunder must be in writing,
delivered by certified mail (return receipt requested), personal delivery or
overnight delivery.
46. Remedies
of Grantor
In
the
event that a claim or adjudication is made that Beneficiary has acted
unreasonably or has unreasonably delayed acting in any case where by law or
under the Note, this Deed of Trust or the other Loan Documents, it has an
obligation to act reasonably or promptly, Beneficiary shall not be liable for
any monetary damages, and Grantor's and Guarantor's remedies shall be limited
to
injunctive relief or declaratory judgment.
47. Sole
Discretion of Beneficiary
Wherever
pursuant to this Deed of Trust Beneficiary exercises any right given to it
to
approve or disapprove, or any arrangement or term is to be satisfactory to
Beneficiary, the decision of Beneficiary to approve or disapprove or to decide
that arrangements or terms are satisfactory or not satisfactory shall be in
the
sole discretion, not arbitrary or capricious, of Beneficiary and shall be final
and conclusive, except as may be otherwise expressly and specifically provided
herein.
48. Non-Waiver
The
failure of Beneficiary to insist upon strict performance of any term hereof
shall not be deemed to be a waiver of any term of this Deed of Trust. Grantor
shall not be relieved of Grantor's obligations hereunder by reason of: (a)
the
failure of Beneficiary to comply with any request of Grantor or Guarantor to
take any action to foreclose this Deed of Trust or otherwise to enforce any
of
the provisions hereof or of the Note or the other Loan Documents; (b) the
release, regardless of consideration, of the whole or any part of the Property,
or of any person liable for the Debt or any portion thereof; or (c) any
agreement or stipulation by Beneficiary extending the time of payment or
otherwise modifying or supplementing the terms of the Note, this Deed of Trust
or the other Loan Documents. Beneficiary may resort for the payment of the
Debt
to any other security held by Beneficiary in such order and manner as
Beneficiary, in its discretion, may elect. Beneficiary may take action to
recover the Debt, or any portion thereof, or to enforce any covenant hereof
without prejudice to the right of Beneficiary thereafter to foreclose this
Deed
of Trust. The rights and remedies of Beneficiary under this Deed of Trust shall
be separate, distinct and cumulative and none shall be given effect to the
exclusion of the others. No act of Beneficiary shall be construed as an election
to proceed under any one provision herein to the exclusion of any other
provision. Beneficiary shall not be limited exclusively to the rights and
remedies herein stated but shall be entitled to every right and remedy now
or
hereafter afforded at law or in equity.
49. No
Oral Change
This
Deed
of Trust, and any provisions hereof, may not be modified, amended, waived,
extended, changed, discharged or terminated orally or by any act or failure
to
act on the part of Grantor or Beneficiary, but only by an agreement in writing
signed by the party against whom enforcement of any modification, amendment,
waiver, extension, change, discharge or termination is sought.
50. Liability
If
Grantor or Guarantor consists of more than one person, the obligations and
liabilities of each such person hereunder and of each of Grantor and Guarantor
shall be joint and several. Subject to the provisions hereof requiring
Beneficiary's consent to any transfer of the Property, this Deed of Trust shall
be binding upon and inure to the benefit of Grantor, Guarantor and Beneficiary
and their respective successors and assigns forever.
51. Inapplicable
Provisions
If
any
term, covenant or condition of this Deed of Trust is held to be invalid, illegal
or unenforceable in any respect, this Deed of Trust shall be construed without
such provision.
52. Section
Headings
The
headings and captions of the various Sections of this Deed of Trust are for
convenience of reference only and are not to be construed as defining or
limiting, in any way, the scope or intent of the provisions hereof.
53. Counterparts
This
Deed
of Trust may be executed in any number of counterparts and each such duplicate
original shall be deemed to be an original.
54. Certain
Definitions
Unless
the context clearly indicates a contrary intent or unless otherwise specifically
provided herein, words used in this Deed of Trust may be used interchangeably
in
singular or plural form and the word "Grantor" shall mean "each Grantor or
any
part thereof or any interest therein", the word "Beneficiary" shall mean
"Beneficiary, its successors and assigns, and any subsequent holder of the
Note", the word "Debt" shall mean "the Note and any other evidence of
indebtedness secured by this Deed of Trust", the word "person" shall include
an
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority and any other entity, and the words
"Property" shall include any portion of the Property and any interest therein
and the words "attorneys' fees" shall include any and all attorneys' fees,
paralegal and law clerk fees including, without limitation, fees at the
pretrial, trial and appellate levels incurred or paid by Beneficiary in
protecting its interest in the Property and Collateral and enforcing its rights
hereunder. Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns and pronouns shall include the plural and vice versa.
55. Assignments
Beneficiary
shall have the right to assign or transfer its rights under this Deed of Trust
without limitation. Any assignee or transferee shall be entitled to all the
benefits afforded Beneficiary under this Deed of Trust. Neither Grantor nor
Guarantor shall, without the prior written consent of Beneficiary, which consent
may be withheld in Beneficiary's sole discretion, assign or transfer its rights
under this Deed of Trust or any of the Loan Documents.
56. SUBMISSION
TO JURISDICTION
GRANTOR,
GUARANTOR AND BENEFICIARY EACH HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION
OF
ANY STATE OF TEXAS OR FEDERAL COURT SITTING IN BRAZOS COUNTY, TEXAS OVER ANY
SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS DEED OF TRUST.
GRANTOR, GUARANTOR AND BENEFICIARY EACH MAY, AT ITS SOLE DISCRETION, ELECT
THE
STATE OF TEXAS, OR THE UNITED STATES OF AMERICA FEDERAL DISTRICT COURT HAVING
JURISDICTION OVER BRAZOS COUNTY, TEXAS AS THE VENUE OF ANY SUCH SUIT, ACTION
OR
PROCEEDING. GRANTOR, GUARANTOR AND BENEFICIARY EACH HEREBY IRREVOCABLY WAIVE,
TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE
TO SUCH VENUE AS BEING AN INCONVENIENT FORUM.
57. Agent
for Receipt of Process
Grantor
hereby irrevocably appoints Xxxxxxx X. XxXxxxx, Xx., having an address at 0000
Xxxx Xxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxx Xxxxxx, Xxxxxxxxx 00000, as its
authorized agent to accept and acknowledge, on behalf of Grantor, service of
any
and all process which may be served in any suit, action or proceeding of the
nature referred to in Section 56 hereof in any State or Federal court within
the
State of Texas. If such agent shall cease so to act, Grantor shall irrevocably
designate and appoint without delay another such agent satisfactory to
Beneficiary, and shall promptly deliver to Beneficiary written evidence of
such
other agent's acceptance of such appointment.
58. Service
of Process
To
the
extent permitted by applicable law, process in any suit, action or proceeding
of
the nature referred to in Section 56 hereof may be served: (a) by registered
or
certified mail, postage prepaid, to Grantor or Guarantor, as applicable, at
the
address set forth above or to such other address of which Grantor or Guarantor,
as applicable, shall have given Beneficiary written notice; or (b) if Grantor
or
Guarantor, as applicable, shall not have made an appearance within twenty-one
(21) days after service in accordance with clause (a) of this Section, by hand
delivery to the agent identified in Section 57 hereof, or such successor agent
as shall have been identified in accordance with Section 57 hereof. Nothing
in
this Section shall affect the Beneficiary's right to serve process in any manner
permitted by law, or limit Beneficiary's right to bring proceedings against
Grantor or Guarantor in the courts of any other jurisdiction.
59. WAIVER
OF JURY TRIAL
XXXXXXX
XXXXXX AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY
JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH
RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE NOTE, THIS DEED OF TRUST
OR THE OTHER LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING
IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN
KNOWINGLY AND VOLUNTARILY BY GRANTOR OR GRANTOR, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL
BY
JURY WOULD OTHERWISE ACCRUE. BENEFICIARY IS HEREBY AUTHORIZED TO FILE A COPY
OF
THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY GRANTOR.
60. Homestead
Grantor
hereby waives and renounces all homestead and exemption rights provided by
the
constitution and the laws of the United States and of any state, in and to
the
Property as against the collection of the Debt, or any part
thereof.
61. CHOICE
OF LAW
THIS
DEED
OF TRUST SHALL BE DEEMED TO BE A CONTRACT ENTERED INTO PURSUANT TO TEXAS LAW
AND
SHALL IN ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIED, AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF SUCH JURISDICTION, INCLUDING MATTERS OF CREATION,
PERFECTION AND PRIORITY OF LIENS AND SECURITY INTERESTS, AND FORECLOSURE OR
OTHER ENFORCEMENT ACTIONS, WHICH SHALL ALSO BE GOVERNED BY THE LAWS OF THE
STATE
OF TEXAS.
62. Time
of Essence
Time
is
of the essence of this Deed of Trust and of each and every term, covenant and
condition herein.
63. Survival
All
covenants, representations and warranties made herein shall survive the making
of the Loan and the delivery of the Note and other Loan Documents.
64. No
Third-Party Beneficiary Rights Created
The
parties hereto expressly declare that it is their joint and mutual intention
that this Deed of Trust and the transactions contemplated hereby shall not
be
construed as creating a third party beneficiary contract, and neither this
Deed
of Trust nor any of the other Loan Documents shall be construed as giving or
conferring any rights or benefits whatsoever to or upon any other persons or
entities other than Grantor, Guarantor and Beneficiary.
65. Discharge
If
all
indebtedness secured hereby is promptly paid when due and all other provisions
hereof are faithfully performed, the mortgage of the Property shall be null
and
void, and shall be discharged, otherwise to remain in full force and
effect.
66. Maintaining
Priority of Deed of Trust
(a) Grantor
shall, at its expense, cause the recordation of this Deed of Trust and of any
other instrument evidencing or securing the Note wherever such recording would
or might be required in order to protect the first lien and priority of this
Deed of Trust or such instrument against the claims of third parties. Grantor
hereby covenants and agrees at all times, at its sole expense, to take such
other action and execute and record such other instruments as may be necessary
or desirable to preserve and protect the first lien and priority of this Deed
of
Trust and all other instruments evidencing or securing the Note.
67. Costs.
(a) Grantor
acknowledges and confirms that Beneficiary shall impose certain administrative
processing and/or commitment fees in connection with (a) the extension, renewal,
modification, amendment and termination of its loans, (b) the release or
substitution of collateral therefor, (c) obtaining certain consents, waivers
and
approvals with respect to the Property, or (d) the review of any Lease or
proposed Lease or the preparation or review of any subordination and
non-disturbance agreement. Grantor further acknowledges and confirms that it
shall be responsible for the payment of all costs of reappraisal of the Property
or any part thereof, whether required by law, regulation, Beneficiary or any
governmental or quasi-governmental authority. Grantor hereby acknowledges and
agrees to pay, immediately, with or without demand, all such fees (as the same
may be increased or decreased from time to time), and any additional fees of
a
similar type or nature which may be imposed by Beneficiary from time to time,
upon the occurrence of any such event or otherwise. Wherever it is provided
for
herein that Grantor pay any costs and expenses, such costs and expenses shall
include, but not be limited to, all legal fees and disbursements of Beneficiary,
whether of retained firms, the reimbursement for the expenses of in-house staff
or otherwise.
(b) Grantor
shall pay all legal fees incurred by Beneficiary in connection with (A) the
preparation of the Note, this Deed of Trust and the other Loan Documents; and
(B) the items set forth in subsection (a) above, and (ii) Grantor shall pay
to
Beneficiary on demand any and all expenses, including legal expenses and
attorneys' fees, incurred or paid by Beneficiary in protecting its interest
in
the Property or Personal Property or in collecting any amount payable hereunder
or in enforcing its rights hereunder with respect to the Property or Personal
Property, whether or not any legal proceeding is commenced hereunder or
thereunder and whether or not any default or Event of Default shall have
occurred and is continuing, together with interest thereon at the Default Rate
from the date paid or incurred by Beneficiary until such expenses are paid
by
Grantor.
68. Defeasance.
(a) At
any
time after the date which is two (2) years after the Loan is sold into a
securitization or three (3) years from the date of the Note and is at least
ninety (90) days prior to the Maturity Date (as such term is defined in the
Note), Grantor may obtain the release of the Property from the lien of this
Deed
of Trust upon the satisfaction of the following conditions
precedent:
(i) not
less
than thirty (30) days prior written notice to Beneficiary specifying a regularly
scheduled payment date (the "Release
Date")
on
which the Defeasance Deposit (hereinafter defined) is to be made;
(ii) the
payment to Beneficiary of interest accrued and unpaid on the principal balance
of the Note to and including the Release Date;
(iii)
the
payment to Beneficiary of all other sums, not including scheduled interest
or
principal payments, due under the Note, this Deed of Trust, the Lease
Assignment, and the other Loan Documents;
(v) the
payment to Beneficiary of the Defeasance Deposit; and
(vi) the
delivery to Beneficiary of:
(A) a
security agreement, in form and substance satisfactory to Beneficiary, creating
a first priority lien on the Defeasance Deposit and the U.S. Obligations
(hereinafter defined) purchased on behalf of Grantor with the Defeasance Deposit
in accordance with this provision of this section (the "Defeasance
Security Agreement");
(B) a
release
of the Property from the lien of this Deed of Trust (for execution by
Beneficiary) in a form appropriate for the jurisdiction in which the Property
is
located;
(C) an
officer's certificate of Grantor certifying that the requirements set forth
in
this subparagraph (a) have been satisfied;
(D) an
opinion of counsel for Grantor in form satisfactory to Beneficiary stating,
among other things, that Beneficiary has a perfected first priority security
interest in the Defeasance Deposit and the U.S. Obligations purchased by
Beneficiary on behalf of Grantor;
(E) evidence
in writing from the applicable Rating Agencies to the effect that such release
will not result in a re-qualification, reduction or withdrawal of any rating
in
effect immediately prior to such defeasance for any securities issued in
connection with a secondary market transaction; and
(F) such
other certificates, documents or instruments as Beneficiary may reasonably
request.
In
connection with the conditions set forth in subparagraph (a)(v) above, Grantor
hereby appoints Beneficiary as its agent and attorney-in-fact for the purpose
of
using the Defeasance Deposit to purchase U.S. Obligations which provide payments
on or prior to, but as close as possible to, all successive scheduled payment
dates after the Release Date upon which interest and principal payments are
required under the Note (assuming that the Grantor were to repay the Note in
full on the Maturity Date) and in amounts equal to the scheduled payments due
on
such dates under the Note (the "Scheduled
Defeasance Payments").
Grantor, pursuant to the Defeasance Security Agreement or other appropriate
document, shall authorize and direct that the payments received from the U.S.
Obligations may be made directly to Beneficiary and applied to satisfy the
obligations of the Grantor under the Note.
(b) Upon
compliance with the requirements of this section, the Property shall be released
from the lien of this Deed of Trust and the pledged U.S. Obligations shall
be
the sole source of collateral securing the Note. Any portion of the Defeasance
Deposit in excess of the amount necessary to purchase the U.S. Obligations
required by subparagraph (a) above and satisfy the Grantor's obligations under
this section shall be remitted to the Grantor with the release of the Property
from the lien of this Deed of Trust. In connection with such release, Capmark
Finance Inc. (“Capmark”)
shall
establish or designate a successor entity (the "Successor
Grantor")
and
Grantor shall transfer and assign all obligations, rights and duties under
and
to the Note together with the pledged U.S. Obligations to such Successor
Grantor. The obligation of Capmark to establish or designate a Successor Grantor
shall be retained by Capmark notwithstanding the sale or transfer of this Deed
of Trust unless such obligation is specifically assumed by the transferee.
Such
Successor Grantor shall assume the obligations under the Note and the Defeasance
Security Agreement and Grantor shall be relieved of its obligations thereunder.
The Grantor shall pay One Thousand and No/100 Dollars ($1,000.00) to any such
Successor Grantor as consideration for assuming the obligations under the Note
and the Defeasance Security Agreement. Notwithstanding anything in this Deed
of
Trust to the contrary, no other assumption fee shall be payable upon a transfer
of the Note in accordance with this section, but Grantor shall pay all costs
and
expenses incurred by Beneficiary, including Beneficiary's attorneys' fees and
expenses, incurred in connection with this section.
(c) For
purposes of this section, the following terms shall have the following
meanings:
(i) The
term
"Defeasance
Deposit"
shall
mean an amount equal to the remaining principal amount of the Note, the
Defeasance Yield Premium, any costs and expenses incurred or to be incurred
in
the purchase of U.S. Obligations necessary to meet the Scheduled Defeasance
Payments and any revenue, documentary stamp or intangible taxes or any other
tax
or charge due in connection with the transfer of the Note or otherwise required
to accomplish the agreements of this Section 68;
(ii) The
term
"Defeasance
Yield Premium"
shall
mean the amount (if any) which, when added to the remaining principal amount
of
the Note, will be sufficient to purchase U.S. Obligations providing the required
Scheduled Defeasance Payments; and
(iii) The
term
"U.S.
Obligations"
shall
mean direct non-callable obligations of the United States of
America.
(d) Notwithstanding
any of the foregoing to the contrary, if the Grantor is unable either (i) to
renew or extend the term of the Franchise Agreement in effect as of the Closing
Date such that term of the Franchise Agreement is not less than ten (10) years
after the Closing Date or (ii) enter into (or cause ENN to enter into) an
acceptable Substitute Franchise Agreement, then Grantor shall have the right
to
defease the Loan and to obtain the release of the Property in accordance with
this Section 68.
69. Trustee.
(a) Beneficiary
shall have the irrevocable power, to be exercised at any time and from time
to
time hereafter with or without cause, to substitute a trustee in place of the
Trustee herein named, by an instrument in writing duly executed, acknowledged,
and recorded among the land records of the jurisdiction where the Property
is
located and, when such instrument is so recorded, all the estate of the Trustee
thus superseded shall terminate and all the right, title, and interest of such
Trustee hereunder shall be vested in the trustee named as successor, and such
successor trustee shall have the same powers, rights, and duties which the
Trustee so superseded had under this Deed of Trust. The exercise of this right
to appoint a successor trustee, no matter how often exercised, shall not be
deemed an exhaustion of said right. Beneficiary shall have the right to name
one
or more entities as a successor trustee hereunder.
(b) Trustee,
by acceptance hereof, covenants faithfully to perform and fulfill the trusts
herein created, being liable, however, only for gross negligence or intentional
misconduct, and hereby waives any statutory fee.
(c) Xxxxxxx
may resign at any time upon giving ten (10) days' notice in writing to Grantor
and to Beneficiary.
(d) Beneficiary
hereby ratifies and confirms any and all acts which the herein-named Trustee,
or
its successor in this trust, shall do lawfully by virtue hereof. Grantor hereby
agrees, on behalf of itself and of its heirs, executors, administrators and
assigns, that the recitals contained in any deed or deeds executed in due form
by Trustee or substitute trustee, acting under the provisions of this
instrument, shall be prima facie evidence of the facts recited, and that it
shall not be necessary to prove in any court, otherwise than by such recitals,
the existence of any facts essential to authorize the executed and delivery
of
such deed or deeds and the passing of title thereby.
(e) Trustee
shall not be required to see that this Deed of Trust is recorded, nor be liable
for its validity or its priority as a first deed of trust, or otherwise, nor
shall Trustee be answerable or responsible for performance or observance of
the
covenants and agreement imposed upon Grantor or Beneficiary by this Deed of
Trust or any other agreement. Trustee, as well as Beneficiary, shall have
authority in its discretion to employ agents and attorneys in the execution
of
this Deed of Trust and to protect the interest of Beneficiary hereunder, and
to
the extent permitted by law it shall be compensated and all expenses relating
to
the employment of such agents and/or attorneys, including expenses of
litigation, shall be paid out of the proceeds of the sale of the Property
conveyed hereby should a sale be had, but if no such sale be had, all sums
by
all remedies at law or in equity by which the indebtedness hereby secured may
be
recovered.
(f) Grantor
shall pay all costs, fees, commissions and expenses of the Trustee, its agent
and counsel, in connection with the performance of its duties
hereunder.
(g) If
Trustee constitutes more than one individual, either may act
independently.
70. Local
Law Provisions.
Notwithstanding
any term or provision otherwise set forth in this Deed of Trust, the following
terms and provisions shall govern and control:
(a) Texas
Trustee Provisions.
In
case
of the resignation of the Trustee, or the inability (through death or
otherwise), refusal or failure of the Trustee to act, or at the option of
Beneficiary or the holder(s) of the Debt for any other reason (which reason
need
not be stated), a substitute Trustee may be named, constituted and appointed
by
Beneficiary or the holder(s) of the Debt, without other formality than an
appointment and designation in writing, which appointment and designation shall
be full evidence of the right and authority to make the same and of all facts
therein recited, and this conveyance shall vest in the substitute Trustee the
title, power and duties herein conferred on the Trustee originally named herein,
and the conveyance by the substitute Trustee to the purchaser(s) at any sale
of
the Property or any part thereof shall be equally valid and effective. The
right
to appoint a substitute Trustee shall exist as often and whenever from any
of
said causes, the Trustee, original or substitute, resigns or cannot, will not
or
does not act, or Beneficiary or the holder(s) of the Debt desires to appoint
a
new Trustee. No bond shall ever be required of the Trustee, original or
substitute. The recitals in any conveyance made by the Trustee, original or
substitute, shall be accepted and construed in court and elsewhere as prima
facie evidence and proof of the facts recited, and no other proof shall be
required as to the request by Beneficiary or the holder(s) of the Debt to the
Trustee to enforce this Trust, or as to the notice of or holding of the sale,
or
as to any particulars thereof, or as to the resignation of the Trustee, original
or substitute, to act, or as to the election of Beneficiary or the holder(s)
of
the Debt to appoint a new Trustee, or as to appointment of a substitute Trustee,
and all prerequisites of said sale shall be presumed to have been performed;
each sale made under the powers herein granted shall be a perpetual bar against
Grantor and the heirs, personal representatives, successors and assigns of
Grantor. Trustee, original or substitute, is hereby authorized and empowered
to
appoint any one or more persons as attorney-in-fact to act as Trustee under
him
and in his name, place and xxxxx in order to take any actions that Trustee
is
authorized and empowered to do hereunder, such appointment to be evidenced
by an
instrument signed and acknowledged by said Xxxxxxx, original or substitute;
and
all acts done by said attorney-in-fact shall be valid, lawful and binding as
if
done by said Trustee, original or substitute, in person.
(b) Texas
Power of Sale Provisions.
Beneficiary
may require the Trustee to sell all or part of the Property, at public auction,
to the highest bidder, for cash, at the county courthouse of the county in
Texas
in which the Property or any part thereof is situated, or if the Property is
located in more than one county such sale may be made at the courthouse in
any
county in which the Property is situated. The sale shall take place at such
area
of the courthouse as shall be properly designated from time to time by the
commissioners court (or, if not so designated by the commissioners court, at
such other area in the courthouse as may be provided in the notice of sale
hereinafter described) of the specified county, between the hours of 10:00
o'clock a.m. and 4:00 o'clock p.m. (the
commencement of such sale to occur within three hours following the time
designated in the hereinafter described notice of sale as the earliest time
at
which such sale shall occur, if required by applicable law) on the first Tuesday
of any month, after giving notice of the time, place and terms of said sale
(including the earliest time at which such sale shall occur) and of the property
to be sold in the manner hereinafter described. Notice of a sale of all or
part
of the Property by the Trustee shall be given by posting written notice thereof
at the courthouse door (or other area in the courthouse as may be designated
for
such public notices) of the county in which the sale is to be made, and by
filing a copy of the notice in the office of the county clerk of the county
in
which the sale is to be made, at least twenty-one (21) days preceding the date
of the sale, and if the property to be sold is in more than one county a notice
shall be posted at the courthouse door (or other
area in the courthouse as may be designated for such public notices) and filed
with the county clerk of each county in which the property to be sold is
situated. In addition, the mortgage servicer shall, at least twenty-one (21)
days preceding the date of sale, serve written notice of the proposed sale
by
certified mail on Grantor and each debtor obligated to pay the Debt secured
hereby according to the records of Beneficiary. Service of such notice shall
be
completed upon deposit of the notice, enclosed in a postpaid wrapper, properly
addressed to such debtor at the most recent address as shown by the records
of
Beneficiary, in a post office or official depository under the care and custody
of the United States Postal Service. The affidavit
of any person having knowledge of the facts to the effect that such service
was
completed shall be prima facie evidence of the fact of service. Any notice
that
is required or permitted to be given to Grantor may be addressed to Grantor
at
Grantor's address as stated above. Any notice that is to be given by certified
mail to any other debtor may, if no address for such other debtor is shown
by
the records of Beneficiary, be addressed to such other debtor at the address
of
Grantor as is shown by the records of Beneficiary. Notwithstanding the foregoing
provisions of this paragraph, notice of such sale given in accordance with
the
requirements of the applicable laws of the State of Texas in effect at the
time
of such sale shall constitute sufficient notice of such sale. Trustee may sell
all or any portion of the Property, together or in lots or
parcels, and may execute and deliver to the purchaser or purchasers of such
property good and sufficient deeds of conveyance of fee simple title with
covenants of general warranty made on behalf of Grantor. In no event shall
Trustee be required to exhibit, present or display at any such sale any of
the
personalty described herein to be sold at such sale,
and the
Grantor hereby agrees to deliver all of such personal property to the purchaser
at such sale on the date of sale, and if it should be impossible or
impracticable to make actual delivery of such property, then the title and
right
of possession to such property shall pass to the purchaser at such sale as
completely as if the same
had
been actually present and delivered. Trustee
making such sale shall receive the proceeds thereof and shall apply the same
as
follows: (i) first, he shall pay the reasonable expenses of Trustee and a
reasonable Trustee's fee or commission; (ii) second, he shall pay, so far as
may
be possible, the Debt, discharging first that portion of the Debt arising under
the covenants or agreements herein contained and not evidenced by the Note;
(iii) third, he shall pay the residue, if any, to the persons legally entitled
thereto. Payment of the purchase price to Trustee shall satisfy the obligation
of the purchaser at such sale therefor, and such purchaser shall not be
responsible for the application thereof. The sale or sales by Trustee of less
than the whole of the Property shall not exhaust the power of sale herein
granted, and Trustee is specifically empowered to make successive sale
or
sales under such power until the whole of the Property shall be sold; and if
the
proceeds of such sale or sales of less than the whole of the Property shall
be
less than the aggregate of the Debt and the expenses thereof, this Deed of
Trust
and the lien, security interest and assignment hereof shall remain in full
force
and effect as to the unsold portion of the Property just as though no sale
or
sales had been made; provided, however, that Grantor shall never have any right
to require the sale or sales of less than the whole of the Property, but
Beneficiary shall have the right, at its sole election, to request Trustee
to
sell less than the whole of the Property. If default is made hereunder, the
holder of the Debt or any part thereof on which the payment is
delinquent shall
have the option to proceed with foreclosure in satisfaction of such item either
through judicial proceedings or by directing Trustee to proceed as if under
a
full foreclosure, conducting the sale as herein provided without declaring
the
entire Debt due, and if sale is made because of default of an installment,
or a
part of an installment, such sale may be made subject to the unmatured part
of
the Debt; and it is agreed that such sale, if so made, shall not in any manner
affect the unmatured part of the Debt, but as to such unmatured part this Deed
of Trust shall remain in full force and effect as though no sale had been made
under the provisions of this paragraph. Several sales may be made hereunder
without exhausting the right of sale for any unmatured part of the Debt.
The
Grantor hereby irrevocably appoints the Trustee to be the attorney of
the Grantor,
and in the name and on behalf of the Grantor to execute and deliver any deeds,
transfers, conveyances, assignments, assurances and notices which the Grantor
ought to execute and deliver, and do and perform any and all such acts and
things which the Grantor ought to do and perform under the covenants herein
contained, and generally to use the name of the Grantor in the exercise of
all
or any of the powers hereby conferred on the Trustee. At
any
such sale (1) Grantor hereby agrees, in its behalf and in behalf of its heirs,
executors, administrators, successors, personal representatives and assigns,
that any and all recitals made in any deed of conveyance given by Trustee with
respect to the identity of Beneficiary, the occurrence or existence of any
default, the acceleration of the maturity of any of the Debt, the request to
sell, the notice of sale, the giving
of
notice to all debtors legally entitled thereto, the time, place, terms, and
manner of sale, and receipt, distribution and application of the money realized
therefrom, or the due and proper appointment of a substitute Trustee, and,
without being limited by the foregoing, with respect to any other act or thing
having been duly done by Beneficiary or by Trustee hereunder, shall be taken
by
all courts of law and equity as prima facie evidence that the statements or
recitals state facts and are without further question to be so accepted, and
Grantor hereby ratifies and confirms every act that Trustee or any substitute
Trustee hereunder may lawfully do in the premises by virtue hereof, and (2)
the
purchaser may disaffirm any easement granted, or rental, lease or other contract
of the Property, and may take immediate possession of the Property free from,
and despite the terms of, such grant of easement and rental or lease
contract. Beneficiary
may bid and become the purchaser of all or any part of the Property at any
trustee's or foreclosure sale hereunder, and,
after
paying or accounting for all costs of said sale or sales, the
amount of Beneficiary's successful bid may be credited on the Debt.
Upon any
sale, whether made under the power of sale hereby given or by virtue of judicial
proceedings, the receipt of the Trustee, or of the officer making a sale under
judicial proceedings, shall be a sufficient discharge to the purchaser or
purchasers at any sale for his or their purchase money, and such purchaser
or
purchasers, his or their assigns or personal representatives, shall not, after
paying such purchase money and receiving such receipt of the Trustee or of
such
officer therefor, be obliged to see to the application of such purchase money,
or be in any wise answerable for any loss, misapplication or non-application
thereof. It is the intention of the parties to conduct any foreclosure sale
of
the Property in compliance with Section 51.002 of the Texas Property Code and
any subsequent applicable amendments or supplements thereto.
| (c) |
Entire
Agreement.
|
The
Loan
Documents to which Grantor is a party constitute the entire understanding and
agreement between Grantor and Beneficiary with respect to the transactions
arising in connection with the Indebtedness and supersede all prior written
or
oral understandings and agreements between Grantor and Beneficiary with respect
to the matters addressed in such Loan Documents. Grantor hereby acknowledges
that, except as incorporated in writing in the Loan Documents to which Grantor
is a party, there are not, and were not, and no persons are or were authorized
by Beneficiary to make, any representations, understandings, stipulations,
agreements or promises, oral or written, with respect to the matters addressed
in such Loan Documents.
| (d) |
No
Waiver.
|
Notwithstanding
anything to the contrary contained in this Deed of Trust or the other Loan
Documents, Grantor's rights under Sections 51.003 and 51.004 of the Texas
Property Code have not been waived.
(e) Maximum
Interest.
It
is
expressly stipulated and agreed to be the intent of Grantor and Beneficiary
at
all times to comply strictly with the applicable Texas law governing the maximum
non-usurious rate or non-usurious amount of interest payable on the Indebtedness
(or applicable United States federal law to the extent that it permits
Beneficiary to contract for, charge, take, reserve or receive a greater amount
of interest than under Texas law). If the applicable law is ever judicially
interpreted so as to render usurious any amount (i) contracted for,
charged, taken, reserved or received pursuant to the Note, any of the other
Loan
Documents or any other communication or writing by or between Grantor and
Beneficiary related to the Indebtedness or to the transaction or transactions
that are the subject matter of the Loan Documents, (ii) contracted for,
charged, taken, reserved or received by reason of Beneficiary's exercise of
the
option to accelerate the maturity of the Note and/or any other portion of the
Indebtedness, or (iii) Grantor will have paid or Beneficiary will have
received by reason of any voluntary prepayment by Grantor of the Note and/or
any
other portion of the Indebtedness, then it is Grantor's and Beneficiary's
express intent that all amounts charged in excess of the Maximum Lawful Rate
shall be automatically canceled, ab
initio,
and all
amounts in excess of the Maximum Lawful Rate theretofore collected by
Beneficiary shall be credited on the principal balance of the Note and/or any
of
the other Indebtedness (or, if the Note and all other Indebtedness have been
or
would thereby be paid in full, refunded to Grantor), and the provisions of
the
Note and the other Loan Documents immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
hereunder and thereunder; provided, however, if the Note has been paid in full
before the end of the stated term of the Note, then Grantor and Beneficiary
agree that Beneficiary shall, with reasonable promptness after Beneficiary
discovers or is advised by Grantor that interest was received in an amount
in
excess of the Maximum Lawful Rate, either refund such excess interest to Grantor
and/or credit such excess interest against any other Indebtedness then owing
by
Grantor to Beneficiary. Grantor hereby agrees that as a condition precedent
to
any claim seeking usury penalties or claims against Beneficiary, Grantor will
provide written notice to Beneficiary, advising Beneficiary in reasonable detail
of the nature and amount of the violation, and Beneficiary shall have
sixty (60) days after receipt of such notice in which to correct such usury
violation, if any, by either refunding such excess interest to Grantor or
crediting such excess interest against the Note and/or the other Indebtedness
then owing by Grantor to Beneficiary. All sums contracted for, charged, taken,
reserved or received by Beneficiary for the use, forbearance or detention of
any
of the Indebtedness, including any portion of the Indebtedness evidenced by
the
Note shall, to the extent permitted by applicable law, be amortized or spread,
using the actuarial method, throughout the stated term of the Note and/or the
other Indebtedness (including any and all renewal and extension periods) until
payment in full so that the rate or amount of interest on account of the Note
and/or the other Indebtedness does not exceed the Maximum Lawful Rate from
time
to time in effect and applicable to the Note and/or the other Indebtedness
for
so long as any portion of the Indebtedness is outstanding. In no event shall
the
provisions of Chapter 346 of the Texas Finance Code (which regulates
certain revolving credit loan accounts and revolving triparty accounts) apply
to
the Note and/or any of the other Indebtedness. Notwithstanding anything to
the
contrary contained herein or in any of the other Loan Documents, it is not
the
intention of Beneficiary to accelerate the maturity of any interest that has
not
accrued at the time of such acceleration or to collect unearned interest at
the
time of such acceleration.
As
used
hereunder "Maximum Lawful Rate" means the
maximum lawful and non-usurious rate of interest which may be contracted for,
charged, taken, received or reserved by Beneficiary in accordance with the
applicable laws of the State of Texas (or applicable United States federal
law
to the extent that it permits Beneficiary to contract for, charge, take, receive
or reserve a greater amount of interest than under Texas law), taking into
account all Charges (as herein defined) made in connection with the transaction
evidenced by the Note and the other Loan Documents. To the extent that
Beneficiary is relying on Chapter 303 of the Texas Finance Code to
determine the Maximum Lawful Rate payable on the Note and/or any other portion
of the Indebtedness, Beneficiary will utilize the weekly ceiling from time
to
time in effect as provided in such Chapter 303, as amended. To the extent
United States federal law permits Beneficiary to contract for, charge, take,
receive or reserve a greater amount of interest than under Texas law,
Beneficiary will rely on United States federal law instead of such
Chapter 303 for the purpose of determining the Maximum Lawful Rate.
Additionally, to the extent permitted by applicable law now or hereafter in
effect, Beneficiary may, at its option and from time to time, utilize any other
method of establishing the Maximum Lawful Rate under such Chapter 303 or
under other applicable law by giving notice, if required, to Grantor as provided
by applicable law now or hereafter in effect.
As
used
hereunder "Charges" means all
fees,
charges and/or other things of value, if any, contracted for, charged, received,
taken or reserved by Beneficiary in connection with the transactions relating
to
the Note and the other Loan Documents, which are treated as interest under
applicable law.
THE
WRITTEN LOAN DOCUMENTS TO WHICH GRANTOR IS A PARTY REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.
THERE
ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURE
APPEARS ON FOLLOWING PAGE]
IN
WITNESS WHEREOF,
Xxxxxxx
has duly executed and delivered this Deed of Trust, Assignment of Leases and
Rents, Security Agreement and Fixture Filing under seal as of the day and year
first above written.
GRANTOR:
COMPANY
SUBSIDIARY,
a
Tennessee limited partnership
By: Company
Subsidiary, a
Tennessee
corporation
By:__________________________(SEAL)
Name:________________________
Title:_________________________
STATE
OF
___________________ §
§
COUNTY
OF
_________________ §
This
instrument was ACKNOWLEDGED before me on _______________, 2006, by
______________________________________________, the
_______________________________ of EQI College Station Corporation, a Tennessee
corporation, which is the general partner of EQI College Station Partnership,
L.P., a Tennessee limited partnership, on behalf of said
partnership.
[S
E A
L]
Notary
Public - State of ___________
My
Commission Expires:
_____________________ Printed
Name of Notary Public
EXHIBIT
A
Legal
Description of Property
